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Employment Law Update Final

This document provides an overview and summary of key employment law developments from 2011 and what to expect in 2012. It discusses trends in EEO charges continuing at record highs and expansions of protections under the ADAAA, GINA, and ADEA. Retaliation claims are also taking center stage. The document reviews developments regarding whistleblowing protections and incentives. It covers diversity and inclusion initiatives as well as the rise of social networking in the workplace and related NLRB cases. The central role of HR and employment law compliance in ethics programs is examined. Wage and hour issues are identified as a major risk for many organizations.

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Employment Law Update Key Developments from 2011 & What to Expect in 2012 December 15, 2011 Confidential For Discussion Purposes Only
Reid Bowman, Esq. • General Counsel of ELT. • Over 25 years of HR and labor & employment law experience, primarily working with multi-state employers. • Designs strategic ethics, wage & hour, discrimination prevention, and employment law compliance programs. Confidential For Discussion Purposes Only
Kate Wilson, Esq. • Founding shareholder, Littler Mendelson’s Chicago and Minneapolis offices • Co-chair of Littler’s Retail practice group • Member of Littler’s Steering Committee on Women’s Leadership Initiatives Confidential For Discussion Purposes Only
Agenda • EEO Trends • Harassment prevention compliance requirements • Whistleblowing • Diversity & Inclusion •Social Networking and the Workplace •NLRA and Social Media, rulemaking implementing so called “EFCA-lite” • HR and Ethics Compliance • Wage & Hour Confidential For Discussion Purposes Only
EEO Trends Confidential For Discussion Purposes Only
A Question For You What best describes how employee compliance training is provided:  Mostly live using an outside vendor  Mostly live using internal resources  Mostly online using and outside vendor  Mostly online using internal resources Confidential For Discussion Purposes Only
Charge Filings Continue at Record Highs • Newly announced EEOC charge stats from FY 2011: 99,947 charges, the most in the EEOC’s History! • Follows two prior years of record charges (FY 2010: 99,922; FY 2009: 93,277.) • EEOC recovered over $364M for victims of discrimination in FY 2011, down a bit from the $404M it recovered in FY 2010. (Sources: http://www.eeoc.gov/eeoc/newsroom/release/11-15-11a.cfm; /www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm.) Confidential For Discussion Purposes Only
ADAAA/GINA/ADEA • ADAAA: Final rules issued 3/35/2011 • Expanded definition of “disability” means that many more workers are covered by the ADA • GINA: Incentives for workplace wellness programs • Opinion letter dated 6/24/2011 confirms EEOC position prohibiting employers from offering financial inducements for employees to provide genetic information as part of a wellness program • ADEA: Reasonable Factor Other Than Age (RFOA) Defense • 11/16/2011 Commission approves final rule on RFOA defense by 3-2 party-line vote. Currently under review by OMB. • Expected to track proposed rule which would make it more difficult for employers to defend against disparate impact age discrimination claims Confidential For Discussion Purposes Only
2011: Retaliation Takes Center Stage • Supreme Court made it easier for employees to claim retaliation in January 2009 Crawford decision. • January 2011: Supreme Court again broadened coverage of retaliation claims to now include claims based on someone else’s protected activity (here, a fiancé.) Thompson v. North American Stainless, LP., 131 s. Ct. 863 (2011). • Managers often don’t understand retaliation! See: http://www.elt-inc.com/blog/archive/2011/01/25/brand-new-us-supreme-court-retaliation-case- third-party-claims Confidential For Discussion Purposes Only
EEOC Enforcement Update: A “New Breed” • More Aggressive Posture • Mandatory public press releases for settlements • Refusal to allow early “no fault” settlements in some cases • Requiring injunctive relief with follow-up powers Confidential For Discussion Purposes Only
A Question For You My organization has experienced an increase in the number of employment law claims the past 12 months:  Yes  No  I don’t know Confidential For Discussion Purposes Only
Training on just Sex Harassment prevention is NOT enough. So…. Sexual Workplace Discrimination Harassment Harassment (EEO) REMINDER: 2011 is a mandatory retrain year for most employers with Supervisors in California. Confidential For Discussion Purposes Only
Whistleblowing Confidential For Discussion Purposes Only
Whistleblowing • DOJ collected $3 billion during FY 2010 in FCA settlements and judgments Confidential For Discussion Purposes Only
Recent Whistleblower Legislative Expansion • Dodd-Frank • Sarbanes-Oxley • Fraud Enforcement & Recovery Act • Revised False Claims Act • American Recovery & Reinvestment Act 2009 • Consumer Product Safety Act • 20+ Federal Whistleblower Protection Statutes • Since 2006, 16 states have strengthened laws Confidential For Discussion Purposes Only
Beefed Up Enforcement • $400M budget dedicated to whistleblower issues • SEC rec’d 344 whistleblowing tips in 1st 7 weeks whistleblowing regs became effective • (if annualized, SEC would get over 2550 tips each year!) See: http://www.sec.gov/about/offices/owb/whistleblower-annual-report-2011.pdf Confidential For Discussion Purposes Only
Dodd-Frank: New Whistleblower Provisions • Section 922: 10-30% reward to whistleblowers (not only employees) who alert SEC to violation of the 1934 Securities & Exchange Act (if > $1M): • Dodd Frank prohibits adverse action taken “because of” whistleblowing activity • Determination will be made on case-by-case basis • Employee can file claim directly in federal court • Rules also provide SEC with power to enforce • Most dramatic impact: Employees are NOT required to first complain internally Confidential For Discussion Purposes Only
Maintaining a Diverse and Inclusive Workforce Diversity & Inclusion 18 Confidential For Discussion Purposes Only
Dodd-Frank: Diversity! § 342 • Office of Minority and Women Inclusion • Each agency (the “Bureau”; Fed; SEC; FDIC) must establish new office to: • Develop standards for EEO and racial / ethnic / gender diversity; • Increase minority participation in agency programs / contracts; and • Assess diversity policies and practices of entities regulated by the agency Confidential For Discussion Purposes Only
Diversity (cont’d) • All contracts of an agency: financial institutions, accountants, and providers of legal services • Certify their workforces reflect a “fair inclusion” of women and minorities • When awarding contracts, agency must, “to extent consistent with applicable law,” consider provider’s workforce diversity • Mini-OFCCP’s • What does “fair inclusion” mean? Confidential For Discussion Purposes Only
Diversity, Policy, and Compliance Intersections and Differences Compliance: focus on directing employees to follow legal directives. Legal Directives Policy: important business Policy practices that often go beyond Directives legal directives. Organization Organizational Culture: often Culture key driver behind diversity & inclusion initiatives. Confidential For Discussion Purposes Only
Recent SHRM Study: Key Reported Outcomes of Diversity Initiatives • 76% of Respondents Said the #1 Most Important Outcome of Diversity Training is… • Improved public image • The other top reported outcomes are: • reduced costs associated with turnover, absenteeism and low productivity • improved financial bottom line (profits) • increased organizational competitiveness, • decrease in complaints and litigation, and • retention of a diverse workforce •Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? SHRM October 12, 2010 © 22 Confidential For Discussion Purposes Only
Key Metrics from SHRM Study Key Metrics from October 2010 SHRM Study • 68% of organizations indicated that they have practices in place that address workplace diversity • 48% of organizations provide Diversity training • But 71% of companies with diversity practices in place offer diversity training; • 84% of businesses believed their diversity practices were either “very effective” or “somewhat effective” in achieving their organization’s desired outcome •Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? SHRM October 12, 2010 © 23 Confidential For Discussion Purposes Only
Social Networking, and the Workplace Confidential For Discussion Purposes Only
Social Media Dominance • 22.7% - Percentage of online time spent by U.S. Internet users on social networking sites • Up 43% from 2009 • 8.3% - Percentage of online time spent by U.S. internet users on e-mail • Down 28% from 2009 • Twice as many users over age 50 as compared to users under age 18 • 85% of U.S.–based social networking on Facebook Nielsen, “What Americans Do Online” (Aug. 1, 2010) Confidential For Discussion Purposes Only
Social Media & The Workplace • Only 31% of respondents had a policy specifically addressing off-duty social use • 50% of respondents had no policy • 47% of respondents permitted anyone to access LinkedIn vs. 32% for Facebook and Twitter • 35% permitted no one to access • 42% of respondents had disciplined employees for social media activity • Up from 24% in 2008 Society of Corporate Compliance and Ethics (Feb./Mar. 2011) Confidential For Discussion Purposes Only
Social Media in the News “Nothing I have seen in my brief existence has contradicted my belief that people will do the dumbest thing possible with any technology available to them” Subtitle “But Twitter also magnifies our most asinine urges by eliminating the possibility for subtlety. It is easy to be racist or sexist in 140 characters.” Alexandra Petri, Washington Post, June 7, 2011 Confidential For Discussion Purposes Only
Practical Tips • Update or Create Written policies: • No “one size fits all”; need to consider your culture and business. • Decide which web 2.0 activities to cover. • Decide whether to cover both off and on duty activities. • Decide whether employees can use company resources to access. • Consider impact on other polices (e.g., Workplace Harassment; Code of Conduct; Technology/Resource Use, etc.) Confidential For Discussion Purposes Only
NLRB meets Facebook, and the Implementation of “EFCA-Lite” Confidential For Discussion Purposes Only
NLRA Meets Facebook •On 10/27/10, the NLRB issued a complaint against America Medical Response claiming that AMR suspended then terminated the employee due to negative remarks she posted about her supervisor on her Facebook page from her home computer! •AMR had a policy prohibiting employees from making disparaging, discriminatory or defamatory comments about the Company, its managers, employees or clients. •NLRB claimed this policy interferes with employee’s right to engage in protected concerted activity. •Case was settled, but since then, the NLRB has been extremely active with cases like this Confidential For Discussion Purposes Only
The 2011 Impact of AMR •NLRB focuses substantial attention on social media: • April 2011: Memo from NLRB Acting GC to all Regional Directors • May 2011: NLRB’s Acting GC adds social media to the list of subject in which he is taking particular interest. • By June 2011, NLRB reports at least 1 social media case in every regional office. • August 18, 2011 NLRB GC Memo on 14 cases decided within the past year regarding employee use of social media; Board’s focus is on the “protected, concerted” nature of the speech. Confidential For Discussion Purposes Only
Discipline Stemming From Employee Social Media Activity An Unfair Labor Practice? • Activity must be “concerted” • Involve more than one employee • “Concerted activity” must be “protected,” i.e., related to the terms and conditions of employment • Existing union is not required • With union, even more scrutiny Confidential For Discussion Purposes Only
Add these Questions to your Checklists • What is the subject matter of the post? • Who is participating in the discussions? • Is the employee expressing only an individual gripe? • Are employees acting collectively? • Are the social media posts a direct outgrowth of some prior group discussions? • And consider adding disclaimer to Social Media policy saying it won’t be construed or applied to interfere with Section 7 rights. Confidential For Discussion Purposes Only
“EFCA Lite” • Through rulemaking and its decisions, current NLRB accomplishing many of the components of EFCA => “EFCA Lite”: • June 22, 2011: NLRB published Notice of Proposed Rulemaking in effort to overhaul union election procedures. • November 30, 2011: after receiving ~65,000 comments, NLRB, by 2-1 vote, adopted several measures to speed up union elections: ex. tighter pre-election appeal rules; more Hearing Officer discretion to limit pre-election issues. Result: elections in ~28-35 days after pet. filing! Remember: Most of your managers have never dealt with a union organizing drive, or managed in a unionized environment. Confidential For Discussion Purposes Only
The Central Role of HR and Employment Law Issues in Ethics Compliance Programs Confidential For Discussion Purposes Only
The Central Role of HR / Employment Issues • Largest impact on the largest number of employees. • Hotline statistics are telling: • 61% of initial allegation reports were HR related. (Global Compliance Services) • 62% of complaints were comprised of: harassment / discrimination, wage and hour, workplace violence, workplace policy violation, and workplace safety. (EthicsPoint) • 70% of hotline reports measured over a one year period were employment law related. (The Network) (Open Compliance & Ethics Group – 2004) Confidential For Discussion Purposes Only
Misconduct Most Commonly Observed By Employees • Ethics Resource Center 2009 Survey • 22% - Abusive or intimidating behavior toward employees. • 19% - Lying to employees, customers, vendors, or the public. • 18% - A situation that placed employee interests over organizational interests. • 11% - Health or Safety regulation violations. • 14% - Discrimination on the basis of race, color, gender, age, or other categories. • 11% - Employee benefits violations. • Majority are “classic” employment law issues! Confidential For Discussion Purposes Only
The Laws that Mandate Ethics Compliance & Training 3 key drivers: 1. The 2004 Federal Sentencing Guidelines Amendments (FSGs), and new 2010 amendments. 2. The Sarbanes-Oxley Act of 2002 (SOX), as amended by Dodd-Frank. 3. 2007 & 2008 amendments to the Federal Acquisition Regulations (FAR). Confidential For Discussion Purposes Only
Wage & Hour Confidential For Discussion Purposes Only
A Question For You Do you consider wage and hour issues to be the number one employment law risk facing your organization?  Yes  No Confidential For Discussion Purposes Only
Class Action Employment Lawsuits Are Increasing 5,000 1st six months annualized 4,722 4,500 Total 4,152 92% Wage 4,000 & Hour Total 3,541 3,500 91% Wage 89% & Hour Wage & Hour 3,000 2009 2010 2011 Confidential For Discussion Purposes Only
2009 Class and Collective Action Stats • 208 final reported labor/employment class and collective action settlements. • Settlement amounts were available for 185. • Median: $1,550,000 • Average: $8,705,497 • The $13,200,474,783 settlement of UAW v. Ford Motor (E.D. Mich.) was excluded from these calculations. • Settlement amounts were available for 111 Wage and Hour settlements • Median (W&H): $1,500,000 • Average (W&H): $6,784,532 Confidential For Discussion Purposes Only
2010 Class and Collective Action Stats • 210 final reported labor/employment class and collective action settlements. • Settlement amounts were available for 178. • Median: $2,875,000 • Average: $9,776,995 • Largest: $175 million, Velez v Novartis Pharm. Corp. (S.D.N.Y). • Settlement amounts were available for 123 Wage and Hour settlements. • Median: $1,800,000 • Average: $5,521,853 Confidential For Discussion Purposes Only
January – June 2011 Class and Collective Action Stats • 51 final reported labor/employment class and collective action settlements. • Settlement amounts available for 46. • Median: $1,950,000 • Average: $8,446,559 • Largest: $ 178,600,000, Merkner v AK Steel Corp (S.D. Ohio). • Settlement amounts were available for 32 Wage and Hour settlements. • Median: $1,387,500 • Average: $3,076,272 Confidential For Discussion Purposes Only
Heightened Enforcement by the DOL: FY 2012 Budget Request • DOL seeking $240.9M and 1,677 FTEs for the Wage & Hour Division • An increase of $13.3 M and 95 investigators over 2010 and 2011 levels • Compared to FY 2008: An increase of $65.2M and 469 FTEs Confidential For Discussion Purposes Only
But Finally, Some Good News… • Class Action Waivers: AT&T Mobility L.L.C. v. Concepcion, 179 L. Ed 2d 742 (2011). • Employers should consider whether arbitration is right for their workplace: • Benefits: ideally, faster, less expensive dispute resolution; no class, collective or representative actions; more confidential. • Drawbacks: Cost of enforcing the agreement; cost of arbitrator; rights to appeal. • Tougher Time Certifying Class Actions: Wal-Mart v. Dukes, 131 S.Ct. 2541 (2011) • Already being applied to Wage & Hour cases (e.g., MacGregor v. Farmers Insurance Exchange, No. CV-03088, 2011 U.S. Dist. LEXIS 80361 (D.S.C. July 22, 2011) Confidential For Discussion Purposes Only
A Question For You In the past 12 months, has your organization been faced with a wage & hour claim from current or former employees?  Yes  No  I don’t know Confidential For Discussion Purposes Only
Key Wage & Hour Risk Areas Confidential For Discussion Purposes Only
Employee Classification • Employee vs. Independent contractors? • Paid employee vs. unpaid interns? • See DOL’s guidelines on interns: http://www.dol.gov/whd/regs/comp liance/whdfs71.pdf • Exempt vs. Non-Exempt (from overtime pay requirements). Confidential For Discussion Purposes Only
Top Five Potential Problems with Non-Exempt Pay Practices 1. Auto Deductions for Meal Periods. 2. Rounding. 3. Remote Work. 4. Off-the-Clock Work. 5. Regular Rate Issues. Confidential For Discussion Purposes Only
Combating Off-the-Clock Work Claims • State of the art wage and hour policies. • Working time defined. • Off-the-clock work prohibited. • Meal and rest periods. • Payroll integration. • Robust Complaint Mechanism. • Investigate and resolve using Title VII lessons. • Time Entry Certification. • Audit time records: • Compare time records to other records. • Monitor rounding practices. • Monitor missed punches and supervisory edits. Confidential For Discussion Purposes Only
A Question For You Regarding compliance training, in the next 12 months, my organization is:  Already conducting training  Planning to implement training  Considering training  I don’t know Confidential For Discussion Purposes Only
Combating Off-the-Clock Work Claims • “Faragher Defense” to off-the-clock work. • In certain areas of the law, courts have recognized something called the “doctrine of avoidable consequences,” which prevents a party from recovering damages where the injured party could have avoided harm through reasonable efforts. • Cornerstone of the defense is employee and supervisory training on wage and hour topics. • Most employees and managers don’t know the basic rules or don’t understand them. • The best policies are useless if employees don’t understand them. • Training gives your employees the tools they need to become compliance allies. Confidential For Discussion Purposes Only
Training Solutions • Live training: • Instructor led and tailored to audience (i.e., senior leaders). • When highly customized materials req’d. • E-learning: 40%+ (and growing) of employers today chose e-learning solutions. • Interactive and engaging – hands on experience. • Creates electronic records and employee acknowledgments. • Significant cost savings • Easy to reach bulk of managers and employees – repeatedly. • Ensures exposure to policies Confidential For Discussion Purposes Only
Online Training Advantage • Online training is consistent and repeatable. • As a result, can be presented to a jury or mediator exactly the way learner saw it. • Clearly demonstrates that if after training employee violated policies, it was NOT because of lack of understanding, but deliberate attempt to circumvent employer’s pay rules. Confidential For Discussion Purposes Only
Training ROI • Prevent inadvertent federal and state law violations. • Prevent claims: • Policies are clear and irrefutable. • Plaintiff credibility? • More difficult to certify a class. • Reduce damage awards and potentially build a good faith defense. • Build a culture of compliance. Confidential For Discussion Purposes Only
Focused Solutions Addressing Your Most Critical Compliance Goals Confidential For Discussion Purposes Only
A Question for You… If your organization may be interested in purchasing ELT’s online training solutions, and you would like an ELT Sales Executive to follow up with you, type "YES" in the box below. Confidential For Discussion Purposes Only
Interested in our solutions? info@elt-inc.com www.elt.com │ 877.358.4621 Additional substantive questions? kwilson@littler.com rbowman@elt-inc.com Confidential For Discussion Purposes Only
Subtitle Confidential For Discussion Purposes Only

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Employment Law Update Final

  • 1.
    Employment Law Update Key Developments from 2011 & What to Expect in 2012 December 15, 2011 Confidential For Discussion Purposes Only
  • 2.
    Reid Bowman, Esq. • General Counsel of ELT. • Over 25 years of HR and labor & employment law experience, primarily working with multi-state employers. • Designs strategic ethics, wage & hour, discrimination prevention, and employment law compliance programs. Confidential For Discussion Purposes Only
  • 3.
    Kate Wilson, Esq. • Founding shareholder, Littler Mendelson’s Chicago and Minneapolis offices • Co-chair of Littler’s Retail practice group • Member of Littler’s Steering Committee on Women’s Leadership Initiatives Confidential For Discussion Purposes Only
  • 4.
    Agenda • EEO Trends • Harassment prevention compliance requirements • Whistleblowing • Diversity & Inclusion •Social Networking and the Workplace •NLRA and Social Media, rulemaking implementing so called “EFCA-lite” • HR and Ethics Compliance • Wage & Hour Confidential For Discussion Purposes Only
  • 5.
    EEO Trends Confidential ForDiscussion Purposes Only
  • 6.
    A Question ForYou What best describes how employee compliance training is provided:  Mostly live using an outside vendor  Mostly live using internal resources  Mostly online using and outside vendor  Mostly online using internal resources Confidential For Discussion Purposes Only
  • 7.
    Charge Filings Continueat Record Highs • Newly announced EEOC charge stats from FY 2011: 99,947 charges, the most in the EEOC’s History! • Follows two prior years of record charges (FY 2010: 99,922; FY 2009: 93,277.) • EEOC recovered over $364M for victims of discrimination in FY 2011, down a bit from the $404M it recovered in FY 2010. (Sources: http://www.eeoc.gov/eeoc/newsroom/release/11-15-11a.cfm; /www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm.) Confidential For Discussion Purposes Only
  • 8.
    ADAAA/GINA/ADEA • ADAAA: Finalrules issued 3/35/2011 • Expanded definition of “disability” means that many more workers are covered by the ADA • GINA: Incentives for workplace wellness programs • Opinion letter dated 6/24/2011 confirms EEOC position prohibiting employers from offering financial inducements for employees to provide genetic information as part of a wellness program • ADEA: Reasonable Factor Other Than Age (RFOA) Defense • 11/16/2011 Commission approves final rule on RFOA defense by 3-2 party-line vote. Currently under review by OMB. • Expected to track proposed rule which would make it more difficult for employers to defend against disparate impact age discrimination claims Confidential For Discussion Purposes Only
  • 9.
    2011: Retaliation TakesCenter Stage • Supreme Court made it easier for employees to claim retaliation in January 2009 Crawford decision. • January 2011: Supreme Court again broadened coverage of retaliation claims to now include claims based on someone else’s protected activity (here, a fiancé.) Thompson v. North American Stainless, LP., 131 s. Ct. 863 (2011). • Managers often don’t understand retaliation! See: http://www.elt-inc.com/blog/archive/2011/01/25/brand-new-us-supreme-court-retaliation-case- third-party-claims Confidential For Discussion Purposes Only
  • 10.
    EEOC Enforcement Update:A “New Breed” • More Aggressive Posture • Mandatory public press releases for settlements • Refusal to allow early “no fault” settlements in some cases • Requiring injunctive relief with follow-up powers Confidential For Discussion Purposes Only
  • 11.
    A Question ForYou My organization has experienced an increase in the number of employment law claims the past 12 months:  Yes  No  I don’t know Confidential For Discussion Purposes Only
  • 12.
    Training on justSex Harassment prevention is NOT enough. So…. Sexual Workplace Discrimination Harassment Harassment (EEO) REMINDER: 2011 is a mandatory retrain year for most employers with Supervisors in California. Confidential For Discussion Purposes Only
  • 13.
  • 14.
    Whistleblowing •DOJ collected $3 billion during FY 2010 in FCA settlements and judgments Confidential For Discussion Purposes Only
  • 15.
    Recent Whistleblower LegislativeExpansion • Dodd-Frank • Sarbanes-Oxley • Fraud Enforcement & Recovery Act • Revised False Claims Act • American Recovery & Reinvestment Act 2009 • Consumer Product Safety Act • 20+ Federal Whistleblower Protection Statutes • Since 2006, 16 states have strengthened laws Confidential For Discussion Purposes Only
  • 16.
    Beefed Up Enforcement • $400M budget dedicated to whistleblower issues • SEC rec’d 344 whistleblowing tips in 1st 7 weeks whistleblowing regs became effective • (if annualized, SEC would get over 2550 tips each year!) See: http://www.sec.gov/about/offices/owb/whistleblower-annual-report-2011.pdf Confidential For Discussion Purposes Only
  • 17.
    Dodd-Frank: New WhistleblowerProvisions • Section 922: 10-30% reward to whistleblowers (not only employees) who alert SEC to violation of the 1934 Securities & Exchange Act (if > $1M): • Dodd Frank prohibits adverse action taken “because of” whistleblowing activity • Determination will be made on case-by-case basis • Employee can file claim directly in federal court • Rules also provide SEC with power to enforce • Most dramatic impact: Employees are NOT required to first complain internally Confidential For Discussion Purposes Only
  • 18.
    Maintaining a Diverseand Inclusive Workforce Diversity & Inclusion 18 Confidential For Discussion Purposes Only
  • 19.
    Dodd-Frank: Diversity! §342 • Office of Minority and Women Inclusion • Each agency (the “Bureau”; Fed; SEC; FDIC) must establish new office to: • Develop standards for EEO and racial / ethnic / gender diversity; • Increase minority participation in agency programs / contracts; and • Assess diversity policies and practices of entities regulated by the agency Confidential For Discussion Purposes Only
  • 20.
    Diversity (cont’d) • Allcontracts of an agency: financial institutions, accountants, and providers of legal services • Certify their workforces reflect a “fair inclusion” of women and minorities • When awarding contracts, agency must, “to extent consistent with applicable law,” consider provider’s workforce diversity • Mini-OFCCP’s • What does “fair inclusion” mean? Confidential For Discussion Purposes Only
  • 21.
    Diversity, Policy, andCompliance Intersections and Differences Compliance: focus on directing employees to follow legal directives. Legal Directives Policy: important business Policy practices that often go beyond Directives legal directives. Organization Organizational Culture: often Culture key driver behind diversity & inclusion initiatives. Confidential For Discussion Purposes Only
  • 22.
    Recent SHRM Study:Key Reported Outcomes of Diversity Initiatives • 76% of Respondents Said the #1 Most Important Outcome of Diversity Training is… • Improved public image • The other top reported outcomes are: • reduced costs associated with turnover, absenteeism and low productivity • improved financial bottom line (profits) • increased organizational competitiveness, • decrease in complaints and litigation, and • retention of a diverse workforce •Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? SHRM October 12, 2010 © 22 Confidential For Discussion Purposes Only
  • 23.
    Key Metrics fromSHRM Study Key Metrics from October 2010 SHRM Study • 68% of organizations indicated that they have practices in place that address workplace diversity • 48% of organizations provide Diversity training • But 71% of companies with diversity practices in place offer diversity training; • 84% of businesses believed their diversity practices were either “very effective” or “somewhat effective” in achieving their organization’s desired outcome •Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? SHRM October 12, 2010 © 23 Confidential For Discussion Purposes Only
  • 24.
    Social Networking, and the Workplace Confidential For Discussion Purposes Only
  • 25.
    Social Media Dominance •22.7% - Percentage of online time spent by U.S. Internet users on social networking sites • Up 43% from 2009 • 8.3% - Percentage of online time spent by U.S. internet users on e-mail • Down 28% from 2009 • Twice as many users over age 50 as compared to users under age 18 • 85% of U.S.–based social networking on Facebook Nielsen, “What Americans Do Online” (Aug. 1, 2010) Confidential For Discussion Purposes Only
  • 26.
    Social Media &The Workplace • Only 31% of respondents had a policy specifically addressing off-duty social use • 50% of respondents had no policy • 47% of respondents permitted anyone to access LinkedIn vs. 32% for Facebook and Twitter • 35% permitted no one to access • 42% of respondents had disciplined employees for social media activity • Up from 24% in 2008 Society of Corporate Compliance and Ethics (Feb./Mar. 2011) Confidential For Discussion Purposes Only
  • 27.
    Social Media inthe News “Nothing I have seen in my brief existence has contradicted my belief that people will do the dumbest thing possible with any technology available to them” Subtitle “But Twitter also magnifies our most asinine urges by eliminating the possibility for subtlety. It is easy to be racist or sexist in 140 characters.” Alexandra Petri, Washington Post, June 7, 2011 Confidential For Discussion Purposes Only
  • 28.
    Practical Tips • Updateor Create Written policies: • No “one size fits all”; need to consider your culture and business. • Decide which web 2.0 activities to cover. • Decide whether to cover both off and on duty activities. • Decide whether employees can use company resources to access. • Consider impact on other polices (e.g., Workplace Harassment; Code of Conduct; Technology/Resource Use, etc.) Confidential For Discussion Purposes Only
  • 29.
    NLRB meets Facebook, and the Implementation of “EFCA-Lite” Confidential For Discussion Purposes Only
  • 30.
    NLRA Meets Facebook •On10/27/10, the NLRB issued a complaint against America Medical Response claiming that AMR suspended then terminated the employee due to negative remarks she posted about her supervisor on her Facebook page from her home computer! •AMR had a policy prohibiting employees from making disparaging, discriminatory or defamatory comments about the Company, its managers, employees or clients. •NLRB claimed this policy interferes with employee’s right to engage in protected concerted activity. •Case was settled, but since then, the NLRB has been extremely active with cases like this Confidential For Discussion Purposes Only
  • 31.
    The 2011 Impactof AMR •NLRB focuses substantial attention on social media: • April 2011: Memo from NLRB Acting GC to all Regional Directors • May 2011: NLRB’s Acting GC adds social media to the list of subject in which he is taking particular interest. • By June 2011, NLRB reports at least 1 social media case in every regional office. • August 18, 2011 NLRB GC Memo on 14 cases decided within the past year regarding employee use of social media; Board’s focus is on the “protected, concerted” nature of the speech. Confidential For Discussion Purposes Only
  • 32.
    Discipline Stemming FromEmployee Social Media Activity An Unfair Labor Practice? • Activity must be “concerted” • Involve more than one employee • “Concerted activity” must be “protected,” i.e., related to the terms and conditions of employment • Existing union is not required • With union, even more scrutiny Confidential For Discussion Purposes Only
  • 33.
    Add these Questionsto your Checklists • What is the subject matter of the post? • Who is participating in the discussions? • Is the employee expressing only an individual gripe? • Are employees acting collectively? • Are the social media posts a direct outgrowth of some prior group discussions? • And consider adding disclaimer to Social Media policy saying it won’t be construed or applied to interfere with Section 7 rights. Confidential For Discussion Purposes Only
  • 34.
    “EFCA Lite” • Through rulemaking and its decisions, current NLRB accomplishing many of the components of EFCA => “EFCA Lite”: • June 22, 2011: NLRB published Notice of Proposed Rulemaking in effort to overhaul union election procedures. • November 30, 2011: after receiving ~65,000 comments, NLRB, by 2-1 vote, adopted several measures to speed up union elections: ex. tighter pre-election appeal rules; more Hearing Officer discretion to limit pre-election issues. Result: elections in ~28-35 days after pet. filing! Remember: Most of your managers have never dealt with a union organizing drive, or managed in a unionized environment. Confidential For Discussion Purposes Only
  • 35.
    The Central Roleof HR and Employment Law Issues in Ethics Compliance Programs Confidential For Discussion Purposes Only
  • 36.
    The Central Roleof HR / Employment Issues • Largest impact on the largest number of employees. • Hotline statistics are telling: • 61% of initial allegation reports were HR related. (Global Compliance Services) • 62% of complaints were comprised of: harassment / discrimination, wage and hour, workplace violence, workplace policy violation, and workplace safety. (EthicsPoint) • 70% of hotline reports measured over a one year period were employment law related. (The Network) (Open Compliance & Ethics Group – 2004) Confidential For Discussion Purposes Only
  • 37.
    Misconduct Most CommonlyObserved By Employees • Ethics Resource Center 2009 Survey • 22% - Abusive or intimidating behavior toward employees. • 19% - Lying to employees, customers, vendors, or the public. • 18% - A situation that placed employee interests over organizational interests. • 11% - Health or Safety regulation violations. • 14% - Discrimination on the basis of race, color, gender, age, or other categories. • 11% - Employee benefits violations. • Majority are “classic” employment law issues! Confidential For Discussion Purposes Only
  • 38.
    The Laws thatMandate Ethics Compliance & Training 3 key drivers: 1. The 2004 Federal Sentencing Guidelines Amendments (FSGs), and new 2010 amendments. 2. The Sarbanes-Oxley Act of 2002 (SOX), as amended by Dodd-Frank. 3. 2007 & 2008 amendments to the Federal Acquisition Regulations (FAR). Confidential For Discussion Purposes Only
  • 39.
    Wage & Hour ConfidentialFor Discussion Purposes Only
  • 40.
    A Question ForYou Do you consider wage and hour issues to be the number one employment law risk facing your organization?  Yes  No Confidential For Discussion Purposes Only
  • 41.
    Class Action EmploymentLawsuits Are Increasing 5,000 1st six months annualized 4,722 4,500 Total 4,152 92% Wage 4,000 & Hour Total 3,541 3,500 91% Wage 89% & Hour Wage & Hour 3,000 2009 2010 2011 Confidential For Discussion Purposes Only
  • 42.
    2009 Class andCollective Action Stats • 208 final reported labor/employment class and collective action settlements. • Settlement amounts were available for 185. • Median: $1,550,000 • Average: $8,705,497 • The $13,200,474,783 settlement of UAW v. Ford Motor (E.D. Mich.) was excluded from these calculations. • Settlement amounts were available for 111 Wage and Hour settlements • Median (W&H): $1,500,000 • Average (W&H): $6,784,532 Confidential For Discussion Purposes Only
  • 43.
    2010 Class andCollective Action Stats • 210 final reported labor/employment class and collective action settlements. • Settlement amounts were available for 178. • Median: $2,875,000 • Average: $9,776,995 • Largest: $175 million, Velez v Novartis Pharm. Corp. (S.D.N.Y). • Settlement amounts were available for 123 Wage and Hour settlements. • Median: $1,800,000 • Average: $5,521,853 Confidential For Discussion Purposes Only
  • 44.
    January – June2011 Class and Collective Action Stats • 51 final reported labor/employment class and collective action settlements. • Settlement amounts available for 46. • Median: $1,950,000 • Average: $8,446,559 • Largest: $ 178,600,000, Merkner v AK Steel Corp (S.D. Ohio). • Settlement amounts were available for 32 Wage and Hour settlements. • Median: $1,387,500 • Average: $3,076,272 Confidential For Discussion Purposes Only
  • 45.
    Heightened Enforcement bythe DOL: FY 2012 Budget Request • DOL seeking $240.9M and 1,677 FTEs for the Wage & Hour Division • An increase of $13.3 M and 95 investigators over 2010 and 2011 levels • Compared to FY 2008: An increase of $65.2M and 469 FTEs Confidential For Discussion Purposes Only
  • 46.
    But Finally, SomeGood News… • Class Action Waivers: AT&T Mobility L.L.C. v. Concepcion, 179 L. Ed 2d 742 (2011). • Employers should consider whether arbitration is right for their workplace: • Benefits: ideally, faster, less expensive dispute resolution; no class, collective or representative actions; more confidential. • Drawbacks: Cost of enforcing the agreement; cost of arbitrator; rights to appeal. • Tougher Time Certifying Class Actions: Wal-Mart v. Dukes, 131 S.Ct. 2541 (2011) • Already being applied to Wage & Hour cases (e.g., MacGregor v. Farmers Insurance Exchange, No. CV-03088, 2011 U.S. Dist. LEXIS 80361 (D.S.C. July 22, 2011) Confidential For Discussion Purposes Only
  • 47.
    A Question ForYou In the past 12 months, has your organization been faced with a wage & hour claim from current or former employees?  Yes  No  I don’t know Confidential For Discussion Purposes Only
  • 48.
    Key Wage &Hour Risk Areas Confidential For Discussion Purposes Only
  • 49.
    Employee Classification • Employeevs. Independent contractors? • Paid employee vs. unpaid interns? • See DOL’s guidelines on interns: http://www.dol.gov/whd/regs/comp liance/whdfs71.pdf • Exempt vs. Non-Exempt (from overtime pay requirements). Confidential For Discussion Purposes Only
  • 50.
    Top Five PotentialProblems with Non-Exempt Pay Practices 1. Auto Deductions for Meal Periods. 2. Rounding. 3. Remote Work. 4. Off-the-Clock Work. 5. Regular Rate Issues. Confidential For Discussion Purposes Only
  • 51.
    Combating Off-the-Clock WorkClaims • State of the art wage and hour policies. • Working time defined. • Off-the-clock work prohibited. • Meal and rest periods. • Payroll integration. • Robust Complaint Mechanism. • Investigate and resolve using Title VII lessons. • Time Entry Certification. • Audit time records: • Compare time records to other records. • Monitor rounding practices. • Monitor missed punches and supervisory edits. Confidential For Discussion Purposes Only
  • 52.
    A Question ForYou Regarding compliance training, in the next 12 months, my organization is:  Already conducting training  Planning to implement training  Considering training  I don’t know Confidential For Discussion Purposes Only
  • 53.
    Combating Off-the-Clock WorkClaims • “Faragher Defense” to off-the-clock work. • In certain areas of the law, courts have recognized something called the “doctrine of avoidable consequences,” which prevents a party from recovering damages where the injured party could have avoided harm through reasonable efforts. • Cornerstone of the defense is employee and supervisory training on wage and hour topics. • Most employees and managers don’t know the basic rules or don’t understand them. • The best policies are useless if employees don’t understand them. • Training gives your employees the tools they need to become compliance allies. Confidential For Discussion Purposes Only
  • 54.
    Training Solutions • Live training: • Instructor led and tailored to audience (i.e., senior leaders). • When highly customized materials req’d. • E-learning: 40%+ (and growing) of employers today chose e-learning solutions. • Interactive and engaging – hands on experience. • Creates electronic records and employee acknowledgments. • Significant cost savings • Easy to reach bulk of managers and employees – repeatedly. • Ensures exposure to policies Confidential For Discussion Purposes Only
  • 55.
    Online Training Advantage • Online training is consistent and repeatable. • As a result, can be presented to a jury or mediator exactly the way learner saw it. • Clearly demonstrates that if after training employee violated policies, it was NOT because of lack of understanding, but deliberate attempt to circumvent employer’s pay rules. Confidential For Discussion Purposes Only
  • 56.
    Training ROI • Preventinadvertent federal and state law violations. • Prevent claims: • Policies are clear and irrefutable. • Plaintiff credibility? • More difficult to certify a class. • Reduce damage awards and potentially build a good faith defense. • Build a culture of compliance. Confidential For Discussion Purposes Only
  • 57.
    Focused Solutions Addressing Your Most Critical Compliance Goals Confidential For Discussion Purposes Only
  • 58.
    A Question forYou… If your organization may be interested in purchasing ELT’s online training solutions, and you would like an ELT Sales Executive to follow up with you, type "YES" in the box below. Confidential For Discussion Purposes Only
  • 59.
    Interested in oursolutions? info@elt-inc.com www.elt.com │ 877.358.4621 Additional substantive questions? kwilson@littler.com rbowman@elt-inc.com Confidential For Discussion Purposes Only
  • 60.