Recession-Proofing Your Employment Practices

By Christopher Adams (cda@wimlaw.com) and Elizabeth Dorminey (ekd@wimlaw.com)

No one can predict where the U.S. economy will be a year from now, but signs point to a slow-down in both the U.S. and global economy. If the U.S. experiences a recession similar to the 2007 to 2009 period, we can expect a significant contraction in GDP, and more specifically, a decline in employment. This is relevant because employment-related litigation often is counter-cyclical: it goes up when the economy goes down. Laid-off and terminated workers have more incentive to sue when they can’t find new jobs right away. Lay-offs can give creative plaintiffs’ attorneys insight into possible systemic problems which can serve as vehicles for class or collective actions.

What can an employer do now to insulate itself from these recession-related risks? Here are a few ideas:

l    Update your Employee Handbook. Too often, employers have policies and procedures set forth in their Handbooks and internal guidelines that they do not follow themselves. If you no longer follow a particular policy or process, take it out of your Handbook, particularly if the policy or process involves employee discipline, payroll practices, leave process and/or employee terminations. In most states a handbook isn’t legally binding, but it’s not helpful to have policies that aren’t practiced.

l    Audit your own records. Make certain that your internal data collection process is consistent, particularly across HR database systems. Don’t be the employer who sent a COBRA notice to the wrong address but sent the letter of termination and Separation Notice to the right one. If you use multiple database systems, make sure they communicate with each other to avoid such pitfalls.

l    Make sure your notices are up to date. An incorrect COBRA or FMLA notice can expose an employer to statutory penalties. Are yours up-to-date? A surprising number of employers never updated their FMLA notices and procedures after the 2009 regulation changes. Are your COBRA notices correct? The last several years have seen a significant increase in COBRA class action litigation related to faulty COBRA notices.

l    Update ERISA-governed benefit plans. Will your benefit plans meet the needs of a workforce that might need greater access to funds due to economic stress? Do you allow distributions upon termination of employment? (There are good arguments for and against allowing such distributions.) Do you allow for loans and/or hardship withdrawals? The IRS has proposed changes to the hardship distribution rules – stay tuned. Also, have your disability-related plans been updated to reflect the 2018 DOL regulatory changes?

l    Be aware of “disparate impact” claims. “Disparate impact” refers to a statistically significant adverse impact on some protected group of a facially neutral policy or practice. If you must lay off employees, check the demographics to be sure the affected employees aren’t predominantly over 40, or female, African-American, or otherwise members of a protected group.

l    Build a plan for unemployment claims. Do you have in place a procedure for responding to your State’s unemployment compensation hearing process? These proceedings can be a goldmine for a plaintiffs’ attorneys. An ill-prepared supervisor or HR representative testifies under oath, and what they say can be turned against the employer.

l    Watch out for WARN. In a worse-case scenario of a mass layoff or facility closing, remember that the Worker Adjustment and Retraining Notification Act (WARN) may apply, requiring advance notice of certain mass layoffs or closings.

l    Stay out of court by choosing arbitration. Consider requiring new or existing employees to sign an arbitration agreement, waiver of class/collective participation, choice of laws, and/or choice of forum agreements. Recent court decisions have upheld such agreements, allowing confidential resolution of individual claims instead of wholesale litigation. This is a complex issue, and no one choice is correct for every employer, but such agreements can help control future legal claims by terminated workers.

As Ben Franklin so famously put it, “an ounce of prevention is worth a pound of cure.” Start recession-proofing your employment policies and practices today.

 

Christopher Adams is a paralegal and a member of the Wage and Hour practice team at Wimberly, Lawson, Steckel, Schneider & Stine, P.C. He can be reached at (404) 365-0900 or cda@wimlaw.com.

Elizabeth Dorminey is a principal in the Athens office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. where she is a member of the Wage and Hour practice team. She can be contacted at ekd@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

You Might Be a Redneck If—You Believe You Were Retaliated Against for Complaining About Being Called a Redneck

By Kathleen J. Jennings (kjj@wimlaw.com)

Those of a us of a certain age remember comedian Jeff Foxworthy’s routine about “You Might Be A Redneck If….” Now a case out of Georgia cautions us that if an employee complains that another employee has called him a redneck/hillbilly, the employer may need to take that complaint seriously. [Bland v. Sam’s East, Inc. , M.D. Ga., No. 4:17-CV-190 (CDL), 1/9/19 ].

Joshua Bland, a white tire technician employed by Sam’s Club, sued his employer claiming, among other things, that he was terminated for complaining to his supervisor that another employee, Edgar Cornell Robinson, who is African-American, called him a “dumb redneck/hillbilly” during a very heated argument at work but was not disciplined for doing so.

When Bland and Robinson were scheduled to work together a couple of days after their argument, Bland was not happy and spoke with their supervisor. Bland argued that he felt Robinson should have been disciplined for calling him a redneck/hillbilly because Bland would have been fired immediately if he had used the “N word” during his confrontation with Robinson. (Whether those two different statements are, in fact, equivalent, is an argument for another day). The employer claimed that during this conversation, Bland acted aggressively toward his supervisor and was rude and disrespectful, and Bland was terminated the next day. Bland claims otherwise; he alleged that he was calm and respectful. This set up a dispute of material facts that caused the judge to deny summary judgment to the employer.

A jury will now decide whether Bland was terminated for his aggressive behavior toward his supervisor or because he complained about what he perceived as race-based favoritism toward Robinson.

The takeaway: When an employee makes a complaint of discrimination or harassment, he or she is protected from retaliation regardless of whether the complaint itself has any merit. So here, Bland just had to show that had a good faith, reasonable belief that he was complaining about discrimination when he complained that Robinson was not disciplined for calling him a “dumb redneck/hillbilly,” and Bland was then protected from retaliation because he made that complaint. Therefore, an employer has to be extra cautious when taking any disciplinary action that is close in time to a complaint.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in employment matters, such as sexual harassment, discrimination, Wage and Hour, OSHA, restrictive covenants, and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2019 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

Happy New Year and happy annual minimum wage increases!

black calculator near ballpoint pen on white printed paper
Photo by Pixabay on Pexels.com

By Chris Adams (cda@wimlaw.com)

Twenty-one states and some thirty-nine municipalities are increasing their minimum wage effective January 1, 2019, or later in 2019. At present, twenty-nine states and approximately fifty municipalities have minimum wage requirements that differ from (and exceed) the federal Fair Labor Standards Act (FLSA). This continues the Balkanization of employment law in the United States, a trend that is almost guaranteed to exacerbate gridlock in Washington and State capitols and fuel wage and hour lawsuits everywhere, in this author’s opinion.
In the southeastern U.S., only Florida has minimum wage requirements that exceed the Federal requirements. This year the state minimum wage in Florida will be $8.46 per hour. Note that some states and municipalities have annual increases that occur on days other than the first of the year (with July 1 or July 31 being common). Others have increases mathematically linked to inflation.
The real take-away isn’t so much a focus on differing minimum wages as the broader involvement by states and municipalities in a broad array of employment-related issues: wage rates and calculation methods, such as different rules for tip credits or allowable deductions, wage notice rules, final payment requirements, leave laws, prohibitions of asking past salary information, “ban the box” laws (prohibiting asking about criminal convictions), and so on. Some states, like California, do not recognize the FLSA’s exemption from overtime for agriculture: others, like Vermont, use the FLSA minimum wage for agriculture and apply the higher State minimum wage to non-agricultural workers.
Bottom line: All employers, and especially those with multi-state operations, should pay attention to State and local laws that affect your employment relationships and liability.

Chris Adams is a paralegal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. He can be contacted at cda@wimlaw.com.

©2019 Wimberly Lawson
The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney or employee.