Yahoo’s widely reported decision to require its remote workforce to physically report to one of Yahoo’s office locations – or face termination of employment – has caused a social media stir. Here are some of the common questions, and our thoughts about whether Yahoo’s decision signals a trend applicable to other companies.
Q: Can Yahoo fire its remote workforce if they refuse to return to the office?
A: For the most part – yes. If employees are employed “at-will,” then they can be fired with or without cause, and without notice. In other words, Yahoo’s statement that they feel the business is best served by the regular, spontaneous interactions resulting from having employees in the office is a legitimate non-discriminatory reason to require employees to return to the offices. Therefore, any employee who refuses to physically report to a Yahoo office location can be lawfully fired for his/her refusal. Exceptions are generally limited to a circumstance where Yahoo had agreed, in writing, that the employee was guaranteed the ability to work from home. Another limited exception is if the employee is allowed to work from home for a specified period of time, as a reasonable accommodation for a verified disability.
Q: Does Yahoo’s decision signal that the other industries should re-evaluate the use of remote workers?
A: While it is always productive to re-evaluate the effectiveness of workforce models, a wholesale rejection of the remote worker model does not necessarily serve an industry’s business needs, or risk management objectives.
First, Yahoo’s action is perceived as providing an opportunity to pare down a “bloated” workforce in an effort to limit the need for extensive reductions in force. Yahoo is betting on there being less morale and legal risk associated with an employee’s resignation vs. an involuntary termination. While companies may face the business need to ramp down certain departments depending on where they are in the approval process, targeted restructurings are generally a more appropriate response.
Second, many companies, such as Life Sciences companies that are paring down costs as they await FDA approval, use remote workers as a cost-savings method, to reduce office overhead costs. In contrast, it has been reported that Yahoo has “excess” office space that presumably would not be cost-effective to offload or sublease. Also, the majority of Life Sciences companies are clustered in the areas of metro NY/NJ, Boston, the Bay Area and LA. Clearly, traffic is a significant issue in these areas and working remotely can offset the loss of productivity caused by lengthy daily commutes.
Remote work is also a necessity for many Life Sciences companies. For example, clinical trials are conducted at investigator sites in the U.S. and around the world. Employees in clinical operations must not only travel on a regular basis, but the ability to work remotely for much of the time when they are not traveling is valued. Also, using a remote workforce is a common response to growth and expansion, especially when there is a need to locate your sales force in states outside of company headquarters and manufacturing facilities.
Fourth, most industry jobs do require a Bachelor’s degree, and workforce studies indicate that approximately one-fifth of Life Sciences jobs require an advanced degree. Clearly, the ability to attract and retain a highly skilled and well-trained workforce has been recognized as a necessity to remain competitive – and that applies to small start-ups and large multi-national pharmaceutical companies. The ability to work remotely, at least part of the time, can be an effective recruiting and retention tool.
Q: What are the emerging HR issues with regards to the use of remote workers?
A: While mobile technology is a tremendous asset in terms of collaboration, the law does not always keep pace with the cross-over intersection of business and personal use of mobile technology. As a result, it is a “new frontier” and employers are faced with having to anticipate the potential legal liability. For example, to the extent that your company is monitoring employees’ e-mail/text and other use of mobile technology to ensure productively, it is critical to warn employees that they are being monitored, and they should have no expectation of privacy. We are also seeing an increasing rise in litigation and employer-adverse agency decisions resulting from employers’ use of information about employees’ non-work activities gleaned from review of their personal Facebook accounts as a basis to discipline or terminate employees. Also, many states have enacted or proposed legislation that makes it unlawful for an employer to directly or indirectly obtain access to an employee’s Facebook account. As a result, we recommend that concerns about employee abuse of telecommuting are best addressed by routine and regular performance management, rather than social media spying.
We also recommend proactive management of concerns relating to data confidentiality and network security. This includes review of existing restrictive covenant agreements to insure that enforceable non-disclosure, non-solicit and, if warranted, non-compete agreements are in place, tailored to protect those assets most critical to your business. Choice of law provisions also need to be considered when the employee is in a different state or country than the HQ location. In addition, we recommend providing the equipment used by the remote employee (phone/laptop, etc.), so that equipment – and all the programs and data contained on those devices – can be legally recovered at the end of the employment relationship. Protocols should also be in place to restrict access to proprietary and other confidential information, to demonstrate that your company has a legitimate need to protect certain information.
Finally, we urge caution when allowing non-exempt employees to work remotely. Wage and hour laws require that the hours non-exempt employees work are accurately tracked, and that they receive overtime for extra hours recorded, including for hours that the Company was on notice that the employee was working, even if those extra hours were not recorded. Employers are being deemed as “on notice” when they are aware that the employee is e-mailing or texting supervisors about work during “off-hours” based on the access provided by mobile technology that might not be otherwise available to a non-exempt employee who is not working remotely.
(Editor’s note – This post was distributed as a Drinker Biddle Client Alert on February 27, 2013. To read other Drinker Biddle alerts and publications click: http://www.drinkerbiddle.com/resources)