Archive for the ‘Hiring and Firing’ Category

Massachusetts has broad statutory protection against discrimination in employment, much of which can be found in G.L. Chapter 151B.  The Massachusetts Supreme Judicial Court recently ruled on two little known provisions of the statute, the “aiding and abetting” provision, found in Section 4(5) and the interference provision, found in section 4(4A).  The most important thing about these provisions is that a person or a business can be liable for discrimination under Chapter 151B even if they are not the employer of the claimant.  The case is reported as Lopez v. Commonwealth, 463 Mass. 696 (2012).  Although the Lopez case concerns the Human Resources Division’s testing for public jobs, the reasoning of the case will apply equally in the private sector.

Discrimination for Interference With Employment Rights:

Under the words of the statute, it is unlawful for “any person to coerce, intimidate, threaten, or interfere with another person in the exercise or enjoyment of any right granted [by the statute].”  The SJC ruled in Lopez that under Section 4(4A), a person “need not be an employer to be subject to an interference claim.  Id. at 706.  Pursuant to this paragraph, in pertinent part, it is unlawful for any person to “interfere with another person in the exercise or enjoyment of any right granted or protected by [G.L. c. 151B].”  Id. 

Although its precise application is hard to define, the message is clear: if you act in a discriminatory fashion you and your company may be liable for the full amount of damages under the statute.  For example, if a salesperson called on your company from ABC Sales, you could be found liable if the complained to ABC Sales that you did not care for this salesperson because of his (race, religion, sexual orientation, etc.) if ABC Sales then took negative action against the salesperson.

In fact, you could be liable even if you did not have a discriminatory motive, so long as your actions were intentional.  Take another example, let’s say that your company hires temporary employees from BCD Temps.  If you required BCD Temps to provide you only with new college graduates, that would likely have a disparate impact on older workers.  Under the reasoning of the SJC in Lopez, you could be held liable to older workers who were not given the job with BCD Temps because of your requirements.

There can also be liability for creating a hostile work environment, even to your non-employees.  You cannot turn a blind eye to egregious discrimination or sexual harassment that is happening in your premises or a worksite you control.

Liability for Aiding and Abetting.

Chapter 151B, Section 4(5) provides in pertinent part that it is unlawful “for any person, whether an employer or an employee or not, to aid, abet, incite, compel or coerce the doing of any [forbidding discriminatory act.”.  In order to prevail on an aiding and abetting claim under Section 4(5), the SJC ruled that a claimant “must show that the defendant (1) committed ‘a wholly individual and distinct wrong … separate and distinct from the claim in main’; (2) ‘that the aider or abetter shared an intent to discriminate not unlike that of the alleged principal offender’; and (3) that ‘the aider or abetter knew of his or her supporting role in an enterprise designed to deprive [the claimant] of a right guaranteed him or her under [G.L. c. 151B].’”  Lopez, at 713, quoting Harmon v. Malden Hosp., 19 Mass. Discrimination L. Rep. 157, 158 (1997).

The biggest difference in aiding and abetting liability is the requirement of specific intent.  It is hard to imagine a case where a claimant could show aiding and abetting, if the claimant could not also show interference with its lower standard.  In the examples set forth above, a claimant would likely be able to prove aiding and abetting if he could show the intent to discriminate.  It remains to be seen whether there are applications of Section 4(5) that do not fit under section 4(4A).

In summary, you have to at least be aware of these types of issues in your business dealings.  While few modern employers intentionally discriminate, you now have to be cautious that your actions will unintentionally discriminate against non-employees.  These are serious matters.  When successful, discrimination awards can and often do range in the hundreds of thousands of dollars, and higher.  If you have any questions on how your business dealings could be putting you at risk, call me at 617.338.7000.

By Adam P. Whitney

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Massachusetts is, like most other states, an employment “at will” state, which means that you can fire an employee for no reason or any reason, as long as it is not an illegal reason. It follows that you don’t need to tell an employee why you are firing him or, right?

Technically, yes, but this can be risky if the employee is in a protected class or otherwise has a prima facie case of employment discrimination. For example, you would not want to fire, for no reason, an employee who just came back from disability leave, FMLA leave, pregnancy leave, or who just told you that they need reasonable accommodations, etc.

If you have a valid reason, you can perhaps still fire such employees. But tread very carefully and get the advice of counsel before doing so; just because you can legally do something doesn’t mean that you should be reckless in inviting a lawsuit, even one that you might win. You should of course try to avoid lawsuits and MCAD or EEOC claims whenever possible. If you have a very valid reason for firing someone in a danger zone for a legal claim, after consultation with competent counsel, you should tell the employee why you are firing them.

Put it in writing even. Think through what will happen if you don’t tell the employee why you fired them. They then run to a plaintiff’s employment lawyer and say that they were fired right after they told their employer that they (were pregnant/became disabled/needed a religious accommodation). The plaintiff’s lawyer will request the personnel file, which will contain no reason for the termination.

Bingo, the employee has a prima facie case for wrongful discrimination. It’s now your obligation to articulate a legitimate, nondiscriminatory reasons for the termination. You see, even though you had no duty to tell the employee why they were being terminated, you have a legal burden of production in discrimination cases to provide the non-discriminatory reason. And what about the fact that you had a legitimate, non-discriminatory reason in the first place, but failed to mention it. You’re just making that up, the plaintiff’s lawyer will say. If you had a legitimate reason for firing, you would have said so at termination.

Wouldn’t you rather defend the case where you had the reason for the termination in writing? I would. Moreover, if you have a detailed notice to the employee about how he (stole company property/lost a key account/harassed other employees), the plaintiff’s lawyer would find that in the personnel file and may not sue in the first place.

If you are considering firing an employee who has a potential claims (and there are many), don’t go it alone. If you need help call me at 617.338.7000. As always, the above is general information and not legal advice.

 

By Adam P. Whitney

Some employers are too smart for their own good.  Employers know that if they get an employee to sign a well-drafted release, the employee can’t sue later.  While that is true, employment law is rarely that simple.  And taking a release that you found on the internet may not cut it.  Releases and settlement agreements are not always one-size fits all documents.

Employers sometimes try to get an employee to sign a release when they fire the employee, but don’t offer anything in return.  This usually will not work.  Releases, like any contract, must be supported by consideration.  Also, some statutes will overrule your contract in some circumstances, such as the Massachusetts payment of wages statute.

Also, sticking a release in front of an employee, who is emotional about being fired can backfire in several ways.  One, the employee will think that he must have a good claim if you are willing to pay some severance in exchange for the employee giving up that claim.  The employee’s attorney may think the same way.  In reality, the employee may have just been sub-par, but you wanted to avoid any future problems.  Instead of preventing a claim, you caused one.

Two, believe it or not, in some situations the offer of a release and payment of a severance or a settlement can be used against you in court.  The employee will spin the story about how your fired them for some illegal reason, and you were so concerned about it that you were trying to pay them off and buy their silence.  Although offers to compromise disputes are normally not admissible, if you unilaterally offer to pay money in exchange for release, this could be admissible against you (this is probably surprising even to some attorneys).

Finally, there are some specific laws with respect to releasing claims.  Under the Age Discrimination in Employment Act, you have to give “older” (over 40 according to the Feds) employees 21 days to review a settlement agreement (45 days in some cases), or your release won’t be effective.  As stated above, there is also the Massachusetts Payment of Wages statute to consider.

There are some tricks of the trade to terminating problem workers and maximizing your chances of getting an effective release.  Contact me if you need to terminate an employee and you need to get a release because there is some issue, or you know the employee is litigious.  Releases and settlement agreements can be a great way to have peace of mind, for relatively short money, but only if done correctly.  The $500 or $1,000 or so that you pay a lawyer to help you avoid a lawsuit is better than the $50,000 to $100,000 or more you will pay to defend the suit.

By, Adam P. Whitney. 617.338.7000.

It’s been widely reported that an employer in Florida fired fourteen otherwise fine employees for wearing the color orange. When I explain to employers that they can technically fire employees at will for any reason, including the color of clothes the employee was wearing that day (yes, I’ve really used that example many times!), I always meant it as an absurd example of the breadth of the employee-at-will standard. Apparently, this firm has a lawyer like me who likes to use absurd examples, and took it way too literally. Bad idea.

Employers really can fire employees for the color of their clothes (except in this situation, which I will get to). But what employer in their right mind would do so? Herein lies the problem. If your company is charged with discrimination, all the terminated employee has to do is articulate a “prima facie” case, which is an easy standard. If the employee is in any protected class, and then the employer replaces the terminated employee with someone not in a protected class, the prima facie case is established. Then, the employer must articulate a legitimate, non-discriminatory reason for the termination. A show of hands for those employers and their lawyers who would like to go in front of a judge and jury and explain why firing someone for wearing orange was legitimate.

In this case, the employer was a law firm. Yes, law firms can do really stupid things with respect to employment issues. It has been reported that the law firm believed that the orange suits were some sort of protest, even though the employees denied this. The employees’ explanation was that they went out together for a drink on payday. One would think that such camaraderie would be encouraged. Moreover, if the employees actually were engaged in a protest, their actions would likely have been protected as concerted activity under the National Labor Relations Act. Some courts have even held that the employer violates the NLRA when the employer fires an employee under the mistaken belief that the employee has engaged in protected concerted action, but actually has not.

There could be other situations where it would be unlawful to fire an employee for the color of their clothes. Aside from the legal implications, callously firing fourteen employees for wearing orange was a shitty thing to do. Dumb, too. Now the firm is dealing with a lot of bad press. Fired Employee Meloney McLeod, has been widely quoted as saying that she is a single mom with four kids, and “I’m out of a job just because I wore orange today.” She’s become the poster-child for how heinous the actions of the firm were.

How would you like to be an employee of that firm now? Would you be proud to work there? Would you give your all for the company, or would you be polishing your résumé and looking for the first opportunity to leave? Worse yet, how would you feel if you were a client of that firm? Would you be proud to say that they were your lawyers? Would you want them representing you in Court, knowing that jurors can and will Google the lawyers on trial? In short, this was a really dumb move that will come back to bite the employer.

If you have any questions about firing employees for wearing mauve, mustard, teal or other non-standard colors, give me a call at 617.338.7000.

By Adam P. Whitney

“Bob,” a new hire, seemed to be a capable, though not stellar employee in the mornings. Apparently, however, he turned his lunch hours into happy hours. Employees began to notice that he turned into Mr. Hyde in the afternoons. He did little work in the afternoons and even fell asleep at his desk on a few occasions. Other employees even complained of excessive flatulence in the afternoons. Bob was demeaning toward the female employees. He boorishly tossed Hershey Kisses at them and asked them to join him for drinks after work. They somehow resisted his charms. Poor Bob was promptly terminated before he caused the company any real problems.

Hiring the wrong person is a costly and time consuming endeavor, even if you promptly terminate him (in fact, most employers do not promptly terminate; human nature being what it is, employers do not want to think that they made a bad decision). The question becomes, how do you hire the right person in the first place?

A careful vetting process is important. If you read my blog often, you know that one rogue employee on your staff can ruin your whole day, or your whole year. While many management lawyers will caution you against Google and social media searches, you won’t hear that from me. While there is a theoretical risk that you will find some “prohibited” information on someone’s Facebook page, it’s well worth the theoretical risk to vet the job candidate. I say to do a complete as possible internet search to look for legal reasons to reject the candidate.

Also, you should really check references and ask probing questions. Be wary of references that provide vague answers or faint praise. Listen carefully.

Conduct a second interview and ask tough questions. Most interviews are cursory and the employer does all the talking. Make sure that the candidate can handle the position and is right for the position.

Sometimes business and family don’t mix well. Family business disputes can be particularly emotional. I’ve seen it all, brothers against brothers, sisters against brothers, sons against fathers, etc., etc. Jealousy and greed can bring out the worst in family relationships. A wise judge recently told me that (when it’s sibling against sibling) sometimes it all comes down to who got the better bicycle for Christmas when the parties were growing up. It’s not really that simple, but there is a kernel of truth there.

I’ve represented both employers and employees in family businesses. When things go bad in these situations, things can get really nasty. The adage that the ones you love can hurt you the most holds true here. I recently settled a case for a fired stockholder-employee for $1.4 million, who was fired by his elderly father after working for the company for thirty years. We alleged that his sister, also a long-term employee, manipulated the elderly father into turning against my client, who was a superstar salesman. This case was reported in Massachusetts Lawyers Weekly as one of the biggest settlements of 2011.

http://masslawyersweekly.com/2012/02/15/son-fired-from-family-business-after-30-years/
http://masslawyersweekly.com/files/2012/01/LargestVS2011.pdf

It’s inevitable that if you have a private business, you will have to consider whether to have family members work there. Sometimes private businesses grow into a family; sometimes your family grows into your business. The more successful the business, the more pressure there will be to hire family members. You may have siblings who need a job. You may have adult children who you want to bring into the business and eventually take over for you when you retire. You may start a business with a son or parent or sibling. All of these things are very common. Things are always hunky dory at the beginning. Maybe even for years.

But, inevitably, personal feelings will get in the way of running the business. Your family members may feel that they are different than other employees. They may feel that the same rules do not apply to them. They may overvalue their worth to the company. They may think of themselves as an owner when they are not. They may be jealous of you as the owner. The opposite is true too. Sometimes the family-member employee is taken for granted. Sometimes other family members are jealous of the other family-member employee who is a superstar, as in my recent case.

If you make decide to hire a family member, here are some general guidelines to avoid some nasty problems:

– Treat your family members like other employees and hold them to the same standards.
– Similarly, try to separate personal feelings and issues with business issues.
– Consider carefully the issue of stock ownership (see my post on terminating stock-holder employees). There are a lot of issues here, such as buy-sell provisions, which are beyond the scope of this post.
– Have clear written employment agreements and comply with the law. Family members can and will sue you for violations of wage statutes, etc.
– Communicate frequently on expectations for salary and ownership potential for the future. Your adult child may think that you are retiring at sixty and giving her the business. You may plan to work until eighty and/or sell the business. These different expectations can lead to big problems.
– Similarly, don’t let issues and problems build for years. Family members can turn into Rogue Employees, too.
– Consider arbitration clauses. Although I’m not always a fan of arbitration, you may not want your family’s dirty laundry aired out in court.

If you are a private business owner or a stockholder in a close corporation, I can help you with these issues. Call me at 617.338.7000.

Adam P. Whitney.

Let’s hear it for H.R.! There’s a cheer you don’t hear in the office much. H.R. is the butt of many jokes, including a lot of funny ones about Toby on The Office (Michael Scott said on one episode: “If I had a gun, with two bullets, and I was in a room with Hitler, Bin Laden and Toby, I would shoot Toby twice”). But from an outside counsel perspective, I absolutely love dealing with clients who have professional, competent human resources personnel.

Whether you owners of the company know it or not, your H.R. manager is worth his or her weight in gold because they keep your company out of so much trouble. Today’s human resources professionals are just that, professionals. More than ever before, H.R. has to know so much about federal and state laws and regulations on leave issues, disability issues, pay issues, benefits issues, etc., etc. And the laws change all of the time, so they need to continually update their knowledge. Some H.R. professionals are specialized in some of these areas, and probably know as much as many lawyers.

H.R. professionals know how to document what needs to be documented. This may sound tedious or boring, until you are faced with a lawsuit or potential lawsuit. Then, having proper documentation can make all of the difference. We have a saying in my business, “if it’s not in writing, it didn’t happen.”

H.R. professionals keep your legal fees down in two ways. One, as mentioned above, they keep you out of trouble, including lawsuits and government inquiries. Two, they can handle a lot of things themselves without having to call the outside lawyers. Most H.R. professionals I know seem to know the precise time when a situation morphs from an H.R. issue to a legal issue.

I know that H.R. professionals do many other critical things as well. If used correctly, they are strategic partners for management and set the tone for the company culture. I’m simply giving my perspective as outside counsel. This brief post is not meant to give a full overview of the entire profession.

If you’re company is not large enough to have a full-time H.R. staff person, consider a company that will serve as your out-sourced human resources division. There are plenty of outsourcing companies who will do that for you. Here’s a good article on outsourcing: http://humanresources.about.com/cs/strategichr/a/outsourcing.htm

If you are an H.R. professional at a private company in Massachusetts, or if you have taken on those duties by default (as sometimes happens), I would love to work with you. Call me at 617.338.7000.

By Adam P. Whitney