Legal Briefs

Welcome to Legal Briefs for HR! This update on issues that matter to employers is provided as a service of the SHRM Texas State Council, which I serve as Co-Director of Legislative Action.

Here’s the latest:

1. Blue Dissuade Shoes – Uh oh. Life just got easier for plaintiffs to avoid summary judgment dismissal of their claims and get in front of a sympathetic jury instead. On June 22, the U.S. Supreme Court addressed a split of circuit court opinions by deciding “What type of adverse employment action is needed, to support a Title VII retaliation claim?” Some courts had held that it must be an “ultimate” employment action (e.g., firing, cut in pay, demotion). Others had found lesser punishments were sufficient. Going forward, courts are instructed to rely on the mythical objective, reasonable employee who (subjectively) would’ve found the employer’s conduct “materially adverse,” which means it might have dissuaded a reasonable worker from making or supporting a charge of discrimination. The Court also said that employer actions that could support a retaliation claim are not limited to those that are related to employment or occur at work. Why? Read the statute. The anti-retaliation provisions are broader than the anti-discrimination provisions, since a ticked-off employer could take action not directly related to the complaining employee’s job or could cause harm outside the workplace. Breathe deeply and count to ten. This decision provides yet another reason for HR and/or counsel to do two things – [1] audit your policies and procedures; and [2] if needed, ramp up training of decision-makers and monitoring of their decisions (preferably before the employment action is taken). Burlington Northern Santa Fe Railroad v. White (U.S. 6-06).
   
   
2. Burning Issue – The U.S. Surgeon General released a report that ups the ante on the health risks of second-hand smoke. What should you do? Start by checking your local and state law. Most states and thousands of cities have laws and ordinances that regulate smoking in public places and workplaces, ranging from complete bans to attempts to balance the preferences of smokers and non-smokers. Some states have “lifestyle discrimination” laws that prohibit an employer from taking adverse employment action based on lawful after hours/off premises conduct, such as smoking. Two websites that can get you started on your research are www.lungaction.org and www.tobacco.org.
   
   
3. Psst! Here’s a Tip – As many as 100,000 former and current Starbucks baristas in CA may get more jingle in their tip jar, if claims against their employer are successful. At issue is a company policy allowing shift supervisors to partake in the tip pool. Plaintiffs are alleging violation of both the Labor Code (sec. 203) and the Business and Professions Code (sec. 17200). Chou v. Starbucks (Cal. Super. Ct. 6-06). That could be a latte money . . .
   
   
4. Immigration Update – Although a conference committee has not yet convened to begin harmonizing disparate House and Senate immigration reform bills, both legislative bodies plan to start by focusing on enforcement and control of the borders, while leaving guest worker and “earned citizenship” programs for another day. Sen. John McCain (R-Ariz.) said a phased-in approach, beginning with “bolstered enforcement” would be acceptable, on June 27. The next day, Rep. John Boehner (R-Ohio) announced the first hearings would focus on “border vulnerabilities.” Both bills contain mandatory employment verification, via expansion of the existing Dept. of Homeland Security “Basic Pilot” system. And check out #6, below, for what happens if your Social Security Administration “no match” letter is not properly handled.
   
   
5. A Gem of a Settlement – About 1400 jewelry store employees (from 1200 locations in 41 states) will benefit from a $1.29 million settlement arising from incorrectly calculated overtime. The employer voluntarily disclosed its violations to the DOL and cooperated in the fix. What happened? A self-audit revealed that incentive pay was not included when calculating nonexempt employees’ “regular rate” and the electronic time-keeping system improperly rounded hours worked. Chao v. Sterling Jewelers, Inc. (N.D. Ohio 6-06). Two suggestions – [1] until the FLSA regulations on including incentive pay in the “regular rate” are changed, do it or switch to percentage bonuses, which calculate the bonus as a percentage of an employee’s earnings (including overtime); and [2] review the regs on rounding practices. Generally, rounding to the nearest five, ten or fifteen minute increment is OK so long as it averages out over time. Hint: If you always round down, it will never average out, and your practice is denying pay for time actually worked. Also, just because your nifty electronic time-keeping system has the capability of doing something, that does not mean it is lawful. The burden is on the employer to make sure it is used in a lawful manner.
   
   
6. Matchmaker – Check out new proposed regulations from DHS on employer handling of SSA “no match” letters. For a copy, go to www.gpoaccess.gov/fr/ and put “page 34281” in the search box for 2006 (Volume 71). There is a proposed “safe harbor” procedure for responding to those letters, but if the discrepancy cannot be resolved and the worker’s ID/work authorization cannot be verified “the employer must choose between taking action to terminate the employee or facing the risk that DHS may find that the employer had constructive knowledge that the employee was an unauthorized alien and therefore, by continuing to employ the alien, violated [federal immigration law].”
   
   
7. RICO Returned – We’ve been watching an 11th Circuit case that alleges an employer and recruitment firms conspired to hire illegal workers, thereby driving down wages, workers’ comp claims and attempts to unionize, to the detriment of a broad class of “legal” employees. The 11th Cir. held the plaintiffs could proceed with claims of racketeering, in violation of RICO, but the Supreme Court remanded the case on June 5, to be reconsidered using a new causation standard. This time around, plaintiffs must show a “direct” injury arising from illegal acts related to the alleged conspiracy. Mohawk Industries v. Williams (U.S. 6-06). Stay tuned!
   
   
8. Stepping Out – Under a new law, DOL VETS must engage in outreach with prospective employers of vets and disabled vets, and they must use “labor exchanges” (think Internet-based services) to facilitate such employment. Recruiters, get ready . . . the new law requires DOL to meet with you, in person!
   
   
9. More Kudos! – Last month, I tipped my virtual hat to Park Place Lexus, for winning a Malcolm Baldridge award, but failed to mention that Dallas is home to two winners this year! Kudos to Richland College, the first U.S. community college to receive the coveted national quality award! For a press release, check out www.richlandcollege.edu/news/baldridge_ceremony.htm.
   
   
10. More Education! For info on HR conferences hosted by proud Texas SHRM chapters, check out www.ahrmaconference2006.com (August 24 & 25 in Austin) and www.wacohr.org/events.asp (August 10 in Waco).
    
    
11. We Need This – A man is suing a web site (www.dontdatehimgirl.com) for defamation, after being included on the “cost-effective weapon in the war on cheating men.” Does it occur to you that HR professionals, especially recruiters, could use a similar site? Maybe www.donthirethem.com?
    

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Butrus, P.C.
900 Three Galleria Tower
13155 Noel Road
Dallas, TX  75240

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (cell)

amross@munckbutrus.com

www.munckbutrus.com