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Monthly Archives

March 2008

ARBITRATION AGREEMENTS: AN OUNCE OF PREVENTION

By Your Employee Matters | No Comments

In another case out of the Fourth Appellate District and the Superior Court of Orange County, Mitri v. Arnel Management Company, the plaintiff sued her former employer and owner and supervisors for sexual discrimination and harassment. The company tried to compel arbitration on the ground that each employee signed their employee handbook which stated “As a condition of employment, all employees are required to sign an arbitration agreement.”

Unfortunately for the company, it could not produce evidence of signed arbitration agreements. The court ruled that the handbook’s reference to arbitration was insufficient to force a plaintiff to arbitrate their claims “in large part because the handbook claimed that it was not a contract of employment and thus, unenforceable.”

Lesson learned: If you’re going to have arbitration agreements, provide them as stand-alone documents, make sure that counsel reviews them first, provide a consideration for signing them, and keep copies.

MOBILE TECHNOLOGY: ARE YOUR EMPLOYEES WORKING ON OR OFF THE CLOCK?

By Your Employee Matters | No Comments

Today’s mobile technologies take us beyond the traditional workplace. How often have you seen parents playing with their BlackBerries while watching their kids’ activities? The fact that we’re constantly “on” might well have implications for wage and hour exposures in the workplace. Start with the understanding that if someone is truly an exempt employee there’s nothing you have to worry about. The challenge comes with non-exempt employees who are entitled to overtime.

An employee’s use of BlackBerry devices and cell phones can potentially violate requirements about accurate time keeping and overtime. As a general rule, the Fair Labor Standards Act does not require an employer to account for “de minimis” levels of activity. According to a Second Circuit opinion:

“[W]hen the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.

“Factors to consider in determining whether work done by an employee should be compensable include:

(1) the practical administrative difficulty of recording the additional time;
(2) the size of the claim in the aggregate, and;
(3) whether the claimants performed the work on a regular basis.

“It should be noted that according to a federal regulation, 10 minutes is not de minimis.”

The next big challenge is to define “on call” time. Where an employee is unable to use their time effectively for their own purposes, they’ll be considered to be “engaged to work” and thus on the clock. However, if they’re not required to remain on the premises, but simply have to leave a way for them to be contacted, they’re not considered to be working while on call. Of course, if an employee needs to be available on short notice, contacting them by their BlackBerry or cell phone only when they’re needed prevents them from being “on call.”

Savvy employers need to understand these definitions. If an employee violates the overtime or on call policy, you still have to pay them for their time, but you can discipline them accordingly. The bottom line: If non-exempt employees are working beyond de minimis amounts of time away from the worksite or if they’re “on call,” be prepared to pay up.

THE BROAD SCOPE OF THE PUBLIC POLICY EXCEPTION

By Your Employee Matters | No Comments

In a case appealed from the Superior Court of Orange County, the Fourth Appellate District agreed with the broad standard set forth in the trial court in determining whether or not an employee’s termination violated public policy. In Casella v. Southwest Dealer Services, Casella claimed that his employment was terminated because he reported the company’s participation in its clients’ fraudulent business practices. Although there was no specific statute to criminalize these practices, the court relied on Penal Code section 487, which broadly proscribes theft by false pretense through fraudulent misrepresentations. In citing other cases they concluded that “when an employer discharges an employee who refuses to defraud a customer, the employer has violated a fundamental public policy and may be liable and charged with wrongful discharge.”

Lesson learned: Be very careful how you deal with any employee who claims employer wrongdoing. Be sure to get the advice of experienced employment law counsel immediately.

THE OLDER THEY GET, THE HARDER THEY FALL

By Your Employee Matters | No Comments

As a result of the growing Baby Boomer population in the workplace, there’s a growing trend toward age discrimination claims. The average verdict hovers around $250,000. Rather than facing the possibility of such a claim, many employers enter release agreements with older workers (defined as over 40!) as part of the termination process. In drafting these releases, it’s wise to consider the impact of the Older Workers Benefits Protection Act (OWBPA), a 190 amendment to the ADA. Here are a few pointers:

  1. The release must be written in plain English and easily understood.
  2. The release must specifically refer to claims arising under the Age Discrimination Employment Act (ADEA).
  3. The release may not address claims that might arise after the date of execution.
  4. There must be consideration for the release beyond that to which the employee would otherwise be entitled.
  5. The employee must be advised, in writing, to consult with their attorney before executing the agreement. (A “lowball” offer seldom gets past their attorney.)
  6. The release must allow the employee to revoke the agreement up to seven days after signing.
  7. The employee must have up to 21 days to consider the release and up to 45 days if it’s part of an incentive offered to a group.
  8. Finally, if you offer the release in connection with an exit incentive or group termination program, you must provide information relating to the job titles and ages of those eligible for the program, and the corresponding information relating to employees in the same job classification who weren’t eligible or weren’t selected for the program.

As you can see, the OWBPA requires extensive disclosure as part of any severance and release process and broadens this disclosure if there’s a group termination.

THE TOP FIVE ASPECTS OF EMPLOYEE JOB SATISFACTION

By Your Employee Matters | No Comments

While we’re on the subject of great places to work, let’s add one more study:

Every year, the Society for Human Resource Management (SHRM) conducts an employee satisfaction survey. According to the 2007 results, the top concerns of employees are:

  • Compensation (59%)
  • Benefits (59%)
  • Job security (53%)
  • Flexibility (52%)
  • Communication (51%)
  • Safety (50%)
  • Recognition of job performance (49%)
  • Relationship with the immediate supervisor (48%)
  • Independence (44%)
  • The ability to utilize skills (44%)

Interestingly, HR executives have a far different list of concerns:

  • Immediate relationship with the supervisors (70%)
  • Compensation (67%)
  • Recognition of job performance (65%)
  • Benefits (62%)
  • Communication (60%)
  • Ability to use skills (49%)
  • Career development (49%)
  • Job security (48%)
  • Flexibility (48%)
  • Career advancement (46%)

Understand this: People go to work to get paid. What they remain most concerned about is getting a fair day’s wage and competitive benefits. Once these factors are taken care of (which is determined by the marketplace, not by you) then concerns such as job security, flexibility, communication, recognition, and the quality of relationships kick in.

As we’ve preached for years, you might as well take a look at Maslow’s Hierarchy of Needs to determine where your caring should be focused. In fact, we’ve actually made his pyramid this month’s Form of the Month. As a reminder, the order of needs is:

  1. Survival
  2. Security
  3. Belonging
  4. Ego gratification
  5. Self-actualization

For example, although belonging to a strong company culture is important to many people, its value is diminished where survival and security needs aren’t properly addressed. Very often what people belong to today is to their career, project, and team, with less loyalty to the company itself.

THE BEST COMPANIES TO WORK FOR

By Your Employee Matters | No Comments

Every year, Fortune magazine ranks the 100 Best Companies to Work For. These rankings review a number of criteria: Job growth, pay, diversity, turnover, training, and so on. It’s interesting that these companies have produced returns that double the S&P 500 average for the past 10 years! Google was No. 1 for the second year in a row. Here are two quotes from their founders:

“I actually don’t think keeping the culture is a goal. I think improving the culture is. We shouldn’t be, like, looking back to our golden years and saying, “Oh, I wish it was the same!”
Sergey Brin
Co-Founder, Google

“It’s common sense: Happy people are more productive.”
Larry Page
Co-Founder, Google

EDITOR’S COLUMN: THE ART OF CARING

By Your Employee Matters | No Comments

Truly caring is a difficult challenge given the fact that most executives fantasize about the day that they have no one to manage! So much of leadership consists of this caring element. Caring for ourselves, our people, customers, and the bottom line. Sounds pretty exhausting.

The fact is, half of all leaders do this caring thing better than the other half. Since like attracts like, if your leadership caring quotient is a 5 out of 10, it will be tough to attract or retain people with a higher caring quotient.

Although intentions are important, actions speak louder than words. Just how are you showing people that you care? Or do you assume that they somehow know you do? Let’s say that you rank 4, 6, or 8 out of 10 on the scale.

What would be the impact to your business and life if you were able to notch it up a few steps?

What if you could actually train yourself to be better at caring?

One of the challenges we face is that we’re all running so hard that it seems as though we don’t have the time to show we care to our loved ones, employees, customers, and God forbid, ourselves. When I ask executives how they feel, many of them will respond “What do you mean?”

My response is, “Exactly.” When they dig into how they feel, it’s often not so good. Often their preferred response is to keep running right past it.

If you want to make a difference in peoples’ lives, including your own, then start caring more! Begin by noticing how you feel. Don’t shut it off or run away from it. Care for yourself.

As you do so, you’ll be able to give more because you’ll have more to give. It won’t seem like a stressor, but rather a blessing. It won’t be energy depleting, but energy enhancing.

A few additional thoughts:

  • Our greatest gift is the ability to be caring toward others. To be of service.
  • Chances are you can do a better job than you’re doing right now. We all can.
  • As the Bible states, “Heal thyself.” This is where it begins. It’s not being selfish; it’s ancient wisdom.
  • Don’t just tell yourself or others that you care! Show it! Begin by expressing your gratitude or thanks, or by acknowledging what’s going right.
  • The biggest trap I see us fall into in our hero or leadership roles is over-commitment. We try to control too much. We put more on our plate than we can possibly handle and then we beat ourselves up when we don’t reach perfection. Then when we’re finished doing that we have to watch how we treat others. This is not caring.
  • Caring doesn’t have to be an exhausting sacrificial affair. Make sure that your efforts “feel right” or don’t do them.

YOUR RISK PROFILE: THINK LIKE AN UNDERWRITER!

By Risk Management Bulletin | No Comments

To make sure that you obtain the best value in protecting your business against the risks it faces, we work closely with a number of quality insurance companies, providing their underwriters with comprehensive information on your coverage requirements, together with your pricing and servicing expectations. You can help us help you by building and maintaining a “risk profile” that lists your exposures, loss data, and insurance contracts. This list should include (but not be limited to):

  • A narrative history of your firm that’s both positive and realistic. Well-managed businesses that have adapted well during up and down economic cycles will encourage underwriters to provide competitive prices on your account.
  • Résumés of key management show that you know your business and have a great team behind you.
  • Sales brochures and Web pages, if applicable.
  • A Dun &Bradstreet Report on your business. If D&B is unable to complete a report, you might get a lower financial grading. Even if you’ve had a few bumps along the financial road, some insurance companies will be willing to work with you — but not if they have to pull teeth to get the relevant information.
  • Audited financials, if applicable.
  • Your estimated sales, Workers Compensation payroll, automobile fleet, and property and equipment values.
  • Historic sales, payroll, and auto units for the past five years.
  • Insurer loss runs/claim runs for the previous five years on all policies, valued within 90 days of your renewal.
  • An outline of your safety plan(s).
  • Fleet maintenance schedules.
  • Your Workers Compensation experience modification factor (Comp mod), if applicable.

Insurance companies have invested heavily in computer systems that track all the relevant data on their clients. Be sure to review this information for accuracy and add it to your own database. Maintaining a comprehensive, accurate and current “risk profile” and staying on top of how this information is presented to company underwriters will give you a far better chance of securing a competitive, effective, and affordable insurance program.