Are You Ready For Your Company’s Holiday Party?

By: Pascal Benyamini

Many companies start planning their holiday party now.  Employers need to know that an employer can be held liable for accidents and injuries caused by their employees who over indulge themselves with alcohol at the party, even if the employee initially made it home safely!  You read that correctly.  The California Court of Appeal, in Purton v. Marriott International, Inc., recently held that the company was potentially liable for a fatal motor vehicle accident caused by one of its employees who had attended the company’s hosted party.  While the employee arrived home safely, the employee left about 20 minutes later to drive another co-worker home.  The co-worker was also intoxicated.  During this trip the employee struck another car, killing its driver.  The trial court granted summary judgment for the employer on the ground that the employer’s potential liability under the doctrine of respondeat superior ended when the employee arrived home.

The court of appeal reversed and held that an employer may be found liable for its employee’s tortious conduct “as long as the proximate cause of the injury occurred within the scope of employment.  It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.”  The court explained that a jury could conclude that the proximate cause of the injury, i.e., the employee’s alcohol consumption, and the negligent conduct, i.e., the car accident, occurred within the scope of his employment.  The court further found that the going and coming rule, which generally exempts an employer from liability for the torts of its employees committed while going to or coming home from their work, was an “analytical distraction” because the “thrust of [plaintiff’s] claim for vicarious liability was that [the employee] was an `instrumentality of danger’ because of what had happened to her at work.”  As such, the court focused on the “act on which vicarious liability is based and not on when the act results in injury.”  The court also stated that the record presented sufficient evidence for a finding that the employee in question breached a duty of due care he owed to the public once he became intoxicated and that the employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.”

This case certainly gives the definition of “within the course and scope of employment” a broader meaning.  That said, the moral of the story: (1) don’t drink and drive; (2) don’t let your employees do so either; and (3) limit your employees’ consumption of alcohol at company events.

The New National Labor Relations Board: Will It Be More of the Same — Or Worse?

By: Mark D. Nelson

For the first time in more than ten years, the National Labor Relations Board will have five Senate-confirmed board members and no battles over recess appointments.  However, the new Board will continue to be dominated by pro-union members selected by President Obama.  The three Democratic members are: current Chairman Mark Pearce; Nancy Schiffer, associate general counsel for AFL-CIO; and Kent Hirozawa, chief counsel to Pearce.  The two Republican members are seasoned management-side labor lawyers Philip Miscimarra and Harry Johnson III.

The confirmation of these Board members ends, at least moving forward, the uncertainty caused by the President’s recess appointments which were ruled invalid by the U.S. Court of Appeals for the D.C. Circuit.  For employers, this new Board is not likely to behave much differently than the Board has since the President was elected.  In fact, employers can expect this Board to continue to issue decisions that favor unions and employees.  In addition, the Board may well exercise its rulemaking power with greater vigor than before.

Here is what employers may see from this new Board:

1.  The Resurrection of the “Quickie/Ambush” Election Rule

In December 2011, the Board adopted a final rule that made numerous and substantial changes in how union election would be handled.  The rule was not implemented because a federal court decided that the Board’s vote to adopt the rule was improper. Significantly, the court did not object to the substance of the rule and its changes.  The new Board could reconsider the rule and take another vote and employers can expect the 3-2 Democratic majority to approve it.  It is also conceivable that this Board could propose a rule that calls for additional changes to the election procedures that would assist unions in winning elections, such as making voting by mail the preferred method of casting ballots; Chairman Pearce has previously indicated his interest in taking a fresh look at the rule.

 2.  Take a Hard Look at Bush-Era Board Decisions

As the Board composition changes with each change in the Presidency, it is common for Boards to re-examine decisions issued under a prior Administration of the other political party.  The Board under George W. Bush was accused of wholesale reversal of rulings under the Clinton Administration.  This new Obama Board can be expected to continue its reversal of Bush-era Board decisions.  By way of example:

Many have expected the Board to overrule a 2007 decision in Register-Guard, in which the Bush-era Board held that an employer can maintain a policy that prohibits employees from using its email system for non-job related solicitation including union organizing.  Current Board law gives unionized employees the right to a union representative at an investigatory interview the employee reasonably believes may lead to discipline.  During the Clinton administration, the Board extended this right to representation to non-union employees.  That extension was reversed by the Board during the Bush administration, by a 3-2 vote.  It would not be a surprise for the new Obama Board to extend representation rights to non-union employees again.

3.  Continued Focus on Non-Union Employers’ Policies

Under the Obama administration, the Board has aggressively focused on policies and practices of employers who have no unionized employees.  The Board has examined at-will statements, social media policies, confidentiality clauses, dress code policies, premises access policies and disciplinary action based on these policies and practices.  Employers should expect the Board to continue its examination of any policy or practice that could interfere with employees’ ability to engage in union organizing or other activity protected by the National Labor Relations Act.

4.  Micro Bargaining Units

In August 2011, the Board ruled in Specialty Healthcare that the Board will approve the bargaining unit requested by a union unless the employer can prove the unit improperly excludes employees who share “an overwhelming community of interest” with the employees in the proposed unit.  Under Specialty Healthcare, the Board has issued numerous decisions finding that small units are appropriate; those units would not have been approved before Specialty Healthcare became law.  Employers can expect the Board to continue to abide by its decision and can hope the Board will provide greater guidance and clarity on how this new standard will be used.

Will the new Board be the same as the old Board?  Time will tell.  It is unlikely the new Board will be more employer-friendly and it is distinctly possible it will be even more aggressive in issuing decisions and rules to enhance unions’ ability to organize employees.

This Conversation May Be Recorded

Editors Note:  Frequent LaborSphere contributor Jerrold J. Wohlgemuth recently wrote a post for our friends at LifeSciencesNow.  While directed at the pharmaceutical industry, the message is one that all employers can tand should ake to heart.  Below is the text of the post.  The original may be viewed here.

By: Jerrold J. Wohlgemuth

As the pharmaceutical industry changes, it must take note of the impact such change has on employee relations and the potential for lawsuits.  Big Pharma has shed thousands of jobs in the past few years, with reports showing that the industry has lost more than 6,000 jobs from January –May 2013, up from the approximately 5000 lost in the first 5 months of 2012.  And there will be more to come as the industry continues to react to lab failures, pressure to cut costs and lower prices due to lower profits, and increased competition from generics.

The result is employee disruption felt not only by those displaced, but also by the remaining workforce which often finds itself under stress from having to maintain productivity with fewer numbers, and who may feel threatened by the culture of layoffs.  Either way, employee relations becomes strained and confrontational.

A significant development in the technology age is the finding in claims filed with the U.S. Equal Employment Opportunity Commission (EEOC) and state agencies that employees have been using smart phones or other mobile devices to surreptitiously record conversations with supervisors, managers and human resources representatives in lay-off meetings, performance reviews and disciplinary actions.  And it should be no surprise that female employees are using smart phones to record male supervisors making inappropriate sexual comments and advancements.  While most recordings reflect that management is engaged in proper communications with employees, the recordings are nevertheless being carefully evaluated by investigators to help determine whether or not to file a claim against the employer.  Some recordings become smoking gun evidence of harassment or discrimination.

Employers should assume that employees are and will continue to record conversations with management, and should therefore take appropriate steps to protect themselves:

    • Do not say anything you would not want a jury or government investigator to hear;
    • Be on the alert for a set-up where the employee tries to get a supervisor or manager to repeat something said at another time;
    • Bring a witness to meetings with employees;
    • Ask the employee if he/she is recording the conversation, advise that it is not permitted, and get verbal assurance from employee that he/she is not recording;
    • Have employee sign a statement that he/she did not record the conversation;
    • Draft policies prohibiting unauthorized recordings in the workplace;
    • Train supervisors and managers to be on the lookout for employees using mobile devices to record conversations.

Remember, every conversation may be evidence in a government investigation or lawsuit.

New Jersey Safe Act Provides Unpaid Leave For Victims Of Domestic Violence

By: Marion B. Cooper

On July 13, 2013, Governor Chris Christie signed the New Jersey Security and Financial Empowerment Act (New Jersey SAFE Act) into law.  Effective on October 1, 2013, the New Jersey SAFE Act, covering public and private employers with 25 or more employees, provides up to 20 days of unpaid leave in one 12-month period when an employee or their child, parent, spouse, domestic or civil union partner has been the victim of a domestic violence incident or a sexually violent offense and the employee has been employed by the employer for at least 12 months and 1,000 base hours during the 12-month period immediately preceding the leave.

Under the New Jersey SAFE Act, each incident of domestic violence or any sexually violent offense constitutes a separate offense for which the eligible employee may take leave, so long as the employee has not already exhausted the allotted 20 days for the 12-month period.  The unpaid leave may be taken intermittently in intervals of no less than one day, as needed for the employee or the employee’s family or household member to handle issues arising from the incident such as:

Seeking medical attention for, or recovering from the injures caused by the domestic or sexual violence;

Obtaining services from a victim services organization;

Obtaining psychological or other counseling;

Participating in safety planning, relocation or other activities to increase the safety of the employee or the
employee’s family or household member and to ensure economic security;

Seeking legal assistance to ensure the health and safety of the employee or the employee’s family or household member; or

Attending, participating in, or preparing for a court proceeding related to the incident of which the employee or the
employee’s family or household member was the victim.

An eligible employee may elect, or the employer may require, the employee to use any or all accrued paid time off during any part of the 20-day leave provided under the New Jersey SAFE Act.   If the employee’s request for leave under the New Jersey SAFE Act is also covered by the New Jersey Family Leave Act or the federal Family and Medical Leave Act, the leave must count simultaneously against the employee’s entitlement under each law.

Before taking leave under the New Jersey SAFE Act, the employee must give the employer written notice, if the necessity for the leave is foreseeable, as far in advance as reasonable and practical under the circumstances.  An employer may also require the employee to substantiate the domestic violence or sexually violent offense which is the basis for the leave.  If the employee provides one or more of the types of documentation listed in the Act such as a restraining order or a letter from the prosecutor, it will be deemed sufficient.

All documentation regarding the leave must be retained by the employer in strictest confidence unless the employee voluntarily authorizes disclosure or it is required by federal or State law, rule or regulation.

The employer must conspicuously display notice of employees’ rights and obligations under the New Jersey SAFE Act in a manner to be prescribed by the Commissioner of Labor and Workforce Development, and must use “other appropriate means to keep its employees so informed.”  Neither the posting, nor guidance regarding what other appropriate means must be used has been issued.

The New Jersey SAFE Act prohibits discrimination, harassment and retaliation against employees who have exercised their rights under the Act.  Aggrieved individuals have a private right of action within one year of the alleged violation to bring suit in Superior Court for recovery of the fully array of damages available to a prevailing plaintiff in common law tort actions, including reinstatement, compensation for lost wages and benefits, an injunction to restrain continued violations and reasonable attorneys’ fees and costs.  In addition, the employer may be assessed a civil fine of $1,000 or up to $2,000 for a first violation, and up to $5,000 for any subsequent violations.

Updates regarding employers’ notice requirements and means to keep employees informed will follow when issued.

Unpaid Internships – Opportunity or Liability?

By: Mark E. Terman

Unpaid internships have long been viewed by students, recent graduates and industry newcomers as a chance to gain experience that might help them select or launch a career, and to some, a chance to eventually land a paying job.  Employers can capitalize on this to teach their trade or profession and find new talent; but, they should not use interns just to cut labor costs.

The United States Department of Labor and many states use six criteria to determine whether internships in for-profit company operations can lawfully be unpaid: 1) the internship must be similar to training given in an educational institution; 2) regular paid workers are not displaced; 3) the intern works under close observation; 4) the employer derives no immediate advantage from intern activities; 5) there is no guaranty of employment upon internship completion; and 6) it is clear up front that there is no expectation of payment.  The overarching theme is that unpaid internships must be educational and predominantly for the benefit of the intern, not the employer.

Some employers have no idea the criteria exist and unwittingly expose themselves to expensive single-plaintiff, class action and regulator’s claims to reclassify interns as employees and to recover unpaid minimum wages, overtime pay, interest, multiple penalties and attorneys fees.  [For more on this see our post on Unpaid Interns Deemed Employees Under the FLSA].  Add to that, there are potential employer and decision maker risks for failure to withhold income and employment taxes.

“Warning bell” examples of internship programs that may be subject to reclassification include, use of unpaid internships to simply minimize labor costs or merely as an extended job interview to see if interns can make the cut later for a paid job; no real, supervised education and training, beyond what the intern might happen to observe; and a predominance of work assigned to interns that paid employees would normally do to generate or support the business.  Likewise, interns whose work is primarily running errands, answering phones, filing, organizing documents, data entry, scanning or coping images, or cleaning – even though they arguably have good exposure to work going on around them – tend to look like they are merely doing what paid support staff employees ought to be doing.

By contrast, if the intern is closely supervised and taught learning objectives that can be applied to multiple different employers, with occasional support staff type work incidental to the learning, with no guaranty of employment, and a writing that specifies a limited duration of an internship without pay, odds are better that intern can lawfully be unpaid.  As a practical matter, if a school or college will give the intern course credit, the odds of legal compliance increase.

A safe path to avoid classification risks is to pay interns at least minimum wage and for any overtime worked, afford meal and rest breaks, and manage their work assignments to reduce overtime needed.   Depending on employer policies and applicable laws, an intern who is part-time or a short-term temporary employee may not be eligible for certain employee benefits.

NJ Supreme Court Expands The Scope Of Retaliation Claims Under The New Jersey Law Against Discrimination

By: Jerrold J. Wohlgemuth

Under the guise of promoting the “broad remedial purposes” of the New Jersey Law Against Discrimination (“LAD”), the New Jersey Supreme Court recently decided that employees may be protected from retaliation under the LAD even when they complain about offensive sexual comments by a supervisor which would not violate the law because they were not heard by any female employee.  In Battaglia v. United Parcel Service, Inc., the plaintiff objected to his supervisor’s repeated use of crude sexual language during discussions with other men about women in the workplace,  and made a vague reference to that language in an anonymous letter of complaint to management.  The employer investigated the complaints raised in that letter, but did not pursue the issue of offensive sexual comments because the letter was too vague to understand that the reference to “language you wouldn’t use [in] your worst nightmare” was about crude sexual comments.  Management – including the supervisor in question – figured out that plaintiff wrote the letter.  It subsequently conducted a separate investigation concerning certain inappropriate conduct by plaintiff and demoted him from his position as a manager.  Plaintiff then sued for retaliation under the LAD, and included a separate cause of action for retaliation under the New Jersey Conscientious Employee Protection Act (“CEPA”) based on other complaints he had raised concerning alleged fraudulent use of corporate credit cards.

Following a jury verdict for plaintiff, the New Jersey Appellate Division affirmed the jury’s verdict for plaintiff under CEPA but reversed with respect to the cause of action for retaliation under the LAD.  That court observed that the LAD only protects employees who reasonably believe that the employer is engaged in conduct which would be unlawful under the LAD, and that plaintiff had not engaged in protected activity because there was no discrimination or hostile work environment where the comments by the supervisor were not direct to, or heard by, any female employee.

The Supreme Court reinstated the LAD verdict, but vacated the verdict under CEPA because, among other things, the plaintiff admitted he did not believe the credit card use had been fraudulent.  With respect to the LAD cause of action for retaliation, the Court rejected the appellate court’s “narrow interpretation” that the Act only protects employees who complain about “demonstrable acts of discrimination.”  Instead, once again invoking the broad remedial purposes of the Act, the Court found that the jury had sufficient evidence to find that the plaintiff had a “good faith belief” that the supervisor’s crude sexual references to women in the workplace was unlawful under the LAD.  In this regard, the Court observed: “when an employee voices a complaint about behavior or activities in the workplace that he or she thinks are discriminatory, we do not demand that he or she accurately understand the nuances of the LAD or that he or she be able to prove that there was an identifiable discriminatory impact upon someone of the requisite protected class.”

It has long been clear that an employee may pursue a cause of action for retaliation under the LAD even where the underlying complaint of discrimination has no merit.  What is not clear is how an employee could have a reasonable belief that he was complaining about unlawful conduct where that conduct – offensive comments about women made to a group of men – could not possibly be unlawful.  That is compounded in this case by the fact that management could hardly be expected to understand that the plaintiff was complaining about unlawful conduct from the vague reference in his letter.  The opinion reflects the Court’s determination to continue to read the LAD expansively to protect employees from retaliation.  Indeed, the driving factor in this case may be reflected in the Court’s observation that the jury had evidence to support a finding that management not only gave short shrift to the complaints, but responded by imposing discipline against the complainer.