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Monthly Archives

May 2008

CONTINUED LIMITATIONS ON ARBITRATION

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The recent United States Supreme Court case of Preston v. Ferrer 552 U.S. ___, 128 S. Ct. 978 (decided February 20th, 2008) reaffirmed that challenges to the validity of a contract calling for arbitration ordinarily “should … be considered by an arbitrator, not a court.”

In addition, the high court ruled that “When parties agree to arbitrate all questions arising under a contract, the FAA supersedes state laws lodging primary jurisdiction in another forum, whether judicial or administrative.”

A series of California cases held that an arbitration provision can’t limit an FEHA claim by an employee failing to exhaust the internal remedy process established by the employer; and an arbitrator’s disclosure obligations are not triggered until he or she is notified of selection to serve as arbitrator (it would be nice to know this up front in the arbitration process). Finally, if arbitration terms are incorporated by reference to another document, this document must clearly state a term for the court to compel arbitration.

Bottom line: If you believe that arbitration will end up saving you dollars, make sure to include the court costs associated with getting to decide whether you arbitrate in the first place! Click here for more information.

THE RISK OF FILING A WEAK DISCRIMINATION CLAIM

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In the recently published case of Villanueva v. City of Colton a California Superior Court judge awarded summary judgment against the plaintiff’s discrimination claims, which was then upheld on appeal. The court also required Villanueva to pay the $40,000 in attorneys’ fees and costs incurred by the City. In requesting the payment of fees and costs, the City asked the court to find that the Villanueva suit was “not brought and maintained with objectionable reasonable cause,” and that it was “unreasonable, frivolous, merit-less, groundless, and vexatious.” Of course Villanueva argued that his lawsuit was brought in good faith and that he would not be able to pay the fees.

Lesson learned: At times it makes sense to vigorously oppose a frivolous claim — especially where there’s the possibility of obtaining attorneys’ fees against the claimant.

HOURS WORKED — AND HOURS PAID

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One of the trickier parts of wage and hour law involves figuring out when you have to pay employees for certain activities. A listing of the issues should help you to realize your potential exposures:

  • Changing uniforms or clothes
  • De minimis time
  • Different rates of pay
  • Independent training
  • Meal periods
  • Meetings
  • On-call time
  • Standby time
  • Travel time
  • Reporting time pay
  • Portal-to-portal

To learn more about these potential exposures, take a look at the Wage and Hour Training Module on HR That Works or visit the DOL Website. California employers should bookmark www.dir.ca.gov, especially relevant opinion letters issued by the Division of Labor Standards Enforcement (www.dir.ca.gov/dlse/dlse.html).

THE ADMINISTRATIVE EXEMPTION

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A California case, Combs v. SkyRiver Communications, denied a director of network operations his overtime claim. Under both California and Federal law, a person is employed in an administrative capacity when their primary duties are: 1) The performance of office or non-manual work directly related to the management policies with general business operations of the company’s customers; 2) where they customarily and regularly exercise discretionary or independent judgment with respect to matters of significance; and 3) where they perform under only general supervision and do work along specialized or technical lines that require special training, experience, or knowledge.

The phrase “directly related to management policies or general business operations” is interpreted to require that an employee perform work directly related to assisting with the running or servicing of the business, as distinguished from work on a manufacturing product line or selling a product in a retail or service establishment. In a sense, the employee is working “on” the business as opposed to “in” the business. 29 CFR Section 541.201 states that the phrase “directly related to the management or general business operations”:

“Includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations; government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities.”

Interpretive guidance regarding the phrase “exercise of discretion and independent judgment with respect to matters of significance” has been interpreted to mean:

“In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. The term ‘matters of significance’ refers to the level of importance or consequence of the work performed.”

“The phrase ‘discretion and independent judgment’ must be applied in the light of all the facts involved in the particular employment situation in which the question arises. Factors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects the business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.”

Note that in California the term “primarily engaged in duties” means “more than one-half the employee’s work time.” The Federal standard uses more of a qualitative than a quantitative approach. Read the case here.

WORKPLACE VIOLENCE: REALITY CHECK

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According to Bureau of Justice statistics, an estimated 1.7 million workers are injured each year in workplace assaults (that’s an average of 33,000 per week). During the 13-year period from 1992 to 2005, there was an average of 807 workplace homicides a year (15 per week).

Workplace violence arises from a variety of circumstances.

Some involve criminals robbing taxicab drivers, convenience stores, or other retail operations; clients or patients attacking providers in healthcare or social services offices; disgruntled workers seeking revenge; or domestic abuse that spills over into the workplace. More recently, the threat of terrorism has loomed over the nation’s workplaces. Yet, as pointed out by the Nation Institute for Occupational Safety and Health (NIOSH), most employers and most employees aren’t aware of the significant threat that on-the-job violence poses.

NIOSH notes a number of barriers to preventing workplace violence: A corporate attitude of denial, a culture of violence, a sense of powerlessness in the workplace, inadequate incentives or disincentives, lack of awareness, poor information, weak communication or training, inadequate resources, failure to report incidents of violence, ineffective follow up, lack of a written policy, lack of teamwork, and more.

Strategies to help prevent workplace violence include:

  • Management and worker commitment
  • A change in cultural attitudes
  • A multi-disciplinary team approach
  • A written policy or program
  • An effective training program
  • An evaluation of the program

NIOSH also discusses environmental, behavioral, and administrative interventions. Learn more about workplace violence and how to prevent it here.

EDITOR’S COLUMN: A COMMON-SENSE APPROACH TO PERFORMANCE MANAGEMENT

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Sometimes we make things so complicated. Performance management is one example. In the old days, we gave people a job description, told them what to do, and graded them annually on a scale from one to five in a number of categories, depending on how well they “performed.” This approach was based on the notion that you can control an employee’s performance — and it doesn’t work anymore! In fact, more than 30 years ago, Dr. Edwards Deming stated, “Performance evaluations are more destructive than beneficial of performance.” So what does work? Here’s a common sense approach to consider. If you think I’ve missed anything, please let me know:

  1. Make sure the employee’s skill sets and personality match the task at hand. In the hiring process, we have to use skill tests and character assessments to understand the strengths and weaknesses of any candidate. This avoids jamming round pegs into square holes. Assuming that we’ve created the right “fit,” the process continues from there as the employee develops. Periodic skill testing and character assessments continue to make sense. We can match our training programs to help improve perceived weaknesses or to enhance strengths.
  2. Know the plan and have a plan. Peter Drucker stated that management tends to recycle ignorance. The starting point is for management to communicate with specificity the vision, mission, values, and strategic goals of the company and the department. Employees have to know the big picture in order to perform at their best. Unfortunately, this communication generally comes once a year in a speech to the workforce and lacks any precision. As discussed in the HR That Works Training Module on Performance Management, annual goal setting makes no sense in today’s environment. Instead, set goals in writing, make them 30-90 days out, and revisit them for 15 minutes each week.
  3. Make sure employees can answer these questions:

    a. What are the three most important things you do every day?

    b. How would you know you were doing them well without having to ask or without being told?

Until employees can answer those questions with precision, any performance management evaluation is meaningless.

  1. When employees don’t perform, first check the system. Most employee failures are system failures. Nine out of 10 people want to do a good job every day. If an employee isn’t performing, first check to see how management could be causing the problem. Do people lack the necessary skill sets? Are they clear about their job duties? Is your management style demotivating them? Is everyone on the team cooperating?
  2. If it’s not the fault of the system, have the employee own the problem. Under the traditional theory of discipline, management gives an oral warning, followed by a written warning, perhaps leave without pay, and then termination. Throughout the process, management owns the problem. If it’s not management’s fault, then the employee should be made to take responsibility. But nobody has a form to do that. If you’re an HR That Works user, consider the Employee Correction form, which places the responsibility squarely on the employee’s shoulders. It makes people acknowledge their deficiencies in writing, what they intend to do about them, and what the consequences should be if they don’t meet their own expectations. We find that when responsibility is placed properly, employees intend to be rougher on themselves than management would be.
  3. Consider a performance improvement plan. Finally, once everybody acknowledges their responsibilities, have a plan for moving forward. Depending on the concern, make it from 30 to 90 days in length, but check in with the employee at least every few weeks. If, after that time, they still can’t or don’t want to “get it” then it’s time to liberate them!

Performance management isn’t rocket science. When people are doing things they can do well and enjoy doing well, they don’t need to be motivated. They’ll want to perform. It’s management’s job to place employees in a position where they are capable of, and responsible for, their success.

WHEN OSHA COMES CALLING

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The Occupational Safety and Health Administration is carrying out Swept Up in Safety Weeks, a series of unannounced workplace inspections that focus on what it calls the four leading causes of accidents: falls, struck by/crushing events, electrocutions, and caught-in-between events. An OSHA “intervention” can be frightening for any business. The agency can fine you or shut you down — and its findings could lead to private lawsuits or referrals to other agencies. Even if you get a clean bill of health, the inspection will distract management and create legal and consulting expenses.

What can you expect if OSHA drops by? Here’s the five-step procedure, together with some ideas to blunt unwarranted charges and minimize the penalties of any violations:

  1. Presentation of Credentials. When an inspector arrives, they’ll first present identification and seek to gain entrance. Check the ID and ask for a business card. You have the right to demand that the inspector obtain a warrant to enter, but many experts recommend against this; it’s equivalent to smacking a hornet’s nest.
  2. Opening Conference. The inspector will tell you the reason for the visit. If it was an employee complaint, you’re entitled to get a copy, but not the name of the complainant.
  3. Examination of Documents. The inspector will ask for your OSHA 300 Log and other accident and injury records. The inspector might also ask to see your written hazard communication program, MSDSs, and your lockout/tagout or other written safety procedures. If you have any doubt that they have a right to see something, ask (courteously) what regulation requires it.
  4. The Walkaround. This is the heart of the inspection. The inspector will identify potential safety and health hazards, evaluate the selection, maintenance, and use of Personal Protective Equipment, document apparent violations, and question employees privately. Do everything you can to co-operate.
  5. Closing Conference. At this meeting, the inspector will go their findings, and if there’s a violation, seek methods and a timetable for correction. You’ll also be told what rights you have and penalties you face if you don’t comply. You can negotiate for more time or lesser penalties. And if things come to loggerheads, you can contest the findings, but you must start this process within 15 days.

The key to coming through this ordeal as unscathed as possible? Keep your wits, act coolly, seek to obey the law and protect your workers, while safeguarding the interests of your business.

WORKPLACE ELECTRICAL SAFETY: SHOCKING MYTHS

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Because electricity is so familiar a force, your employees may think they know all its mysteries. Not so! What they don’t know can hurt – or kill — them. Not long ago, much of the state of Florida went dark. Lights went out. Traffic signals quit, causing huge backups. People were trapped in elevators. It turned out that a worker doing equipment checks at a substation had disabled two protective devices on the system. Much was said about the vulnerability of the system.

However, the worker was just as vulnerable: perhaps more so. Electricity, when freed from its bounds by equipment defect — or more often, lapses in safety procedure — is the nation’s fifth-largest workplace killer, causing more than 400 fatalities a year in a recent 12-year span . Many more workers suffered burns and damage to internal organs, often in a fraction of a second. All too many of these accidents resulted from employee ignorance:

Among the leading misconceptions by workers:

  • Normal household/workplace current can cause only a mild shock. Not so! Even 110-120 volts can be deadly. It depends largely on what resistance the person’s body has to the current, the body part in contact, the duration of the exposure, and other conditions, such as the presence of moisture. Resistance is measured in ohms. A person’s body might have a natural resistance of 100,000 ohms. But on a damp day, this resistance can drop to just 1,000 ohms, says Total Training Resource: Electrical Safety.
  • All individuals are similarly affected by contact with electrical current. Again, not so! Different people may react differently to the same exposure. Especially at risk are those with heart problems. Even a mild shock can cause a heart attack, often fatal.
  • “If I don’t touch it, I can’t be hurt by it.” Another dangerous misconception! Electricity can jump across an air space, in what’s called an arc flash, with a temperature three times that at the surface of the sun. Scientists and safety experts are studying the arc flash phenomenon and what makes it happen in some cases and not others. Much is unknown.
  • “A disconnected circuit is safe to work on.” This isn’t the case if the circuit includes batteries or capacitors that store electricity and can release it suddenly even if the “plug” is no longer in the wall. This is the reason that TV sets and similar devices carry “Do not open” warnings on their cases. Even junked sets can be dangerous.

Our risk management professionals would be happy to work with you in developing and implementing a comprehensive workplace electrical safety program. Just give us a call.